The rapid descent of the U.K.’s Independent Insurance finally hit bottom Sunday night, when a London Court appointed PricewaterhouseCoopers (PwC) as the company’s provisional liquidators after major gaps were found in its claims accounting procedures.
Independent’s shares have already been suspended; it stopped accepting new business last week (See previous articles) and on Friday London’s Financial Times published a letter written last May by Mark Trayhorn, a partner in actuary firm Watson Wyatt, stating that it was impossible to determine the actual extent of Independent’s liabilities, as a number of claims had apparently never been entered into its accounting system.
PwC, which had already been conducting an audit of the company’s accounts, accelerated its investigation over the weekend at the request of the Financial Services Authority (FSA) and the company’s non-executive directors. Following confirmation of possible financial irregularities, including a £4 million ( $5.6 million) loan to founder and ex-CEO Michael Bright, they were appointed to liquidate the company.
For the moment Independent remains solvent, and its claims payment ability appears to be adequate, but it is facing a full investigation by the FSA and a very uncertain future.
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