Insurers' £150m Independent bill

Patrick Hosking12 April 2012

GENERAL insurers were told that they would have to contribute £150m to the industry's self-funding compensation scheme to help meet claims stemming from the collapse of Independent Insurance.

The levy, which is being charged at the rate of 0.66% of premium income, is the first made on general insurers since 1995 and is the biggest since 1994, when £175m was raised.

The money will be paid into the Financial Services Compensation Scheme, the former Policyholders' Protection Board fund, that is now run by the Financial Services Authority.

A fund spokeswoman said £16.5m had already been paid to Independent policyholders deemed to be 'hardship' cases and it was now starting to assess the remaining claims. The levy will also help pay claims flowing from last year's collapse of Chester Street. Many of these are asbestos related claims stemming from employers' liability policies.

The levy has been widely expected since Independent's collapse in the middle of last year. Independent, which was led by Michael Bright, had a substantial portfolio of commercial clients, particularly in the construction sector.

The Serious Fraud Office is currently investigating the failure of Independent Insurance. 'We expect the majority of insurance companies will already have put funds aside to cover this,' scheme chief executive Suzanne McCarthy said.

Create a FREE account to continue reading

eros

Registration is a free and easy way to support our journalism.

Join our community where you can: comment on stories; sign up to newsletters; enter competitions and access content on our app.

Your email address

Must be at least 6 characters, include an upper and lower case character and a number

You must be at least 18 years old to create an account

* Required fields

Already have an account? SIGN IN

By clicking Create Account you confirm that your data has been entered correctly and you have read and agree to our Terms of use , Cookie policy and Privacy policy .

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged in