Enterprise Insurance Goes Bust
About 14,000 policyholders are expected to get compensation after Gibraltar-based carrier Enterprise Insurance recently announced its closure.
Enterprise said there has been a “significant deterioration” in the company’s financial position and that it has been declared insolvent.
“The shareholders of the company have been unable to contribute additional capital into the company,” the 12-year-old insurer said in a notice posted on its website on July 22.
Enterprise said it has asked Gibraltar Financial Services Commission (GFSC) to suspend its authorisation to write new insurance business and initiate moves to control the activities of the company.
According to the insurer, the GFSC is now taking steps to issue winding-up proceedings while notifying regulators about the closure including those in France, Italy, Greece, Norway, Ireland and the UK, where Enterprise has written business.
“The company has endeavoured to find a way out of its predicament but has not been able to do so,” said Peter Taylor, director of legal, enforcement and policy at GFSC.
“We have moved very quickly to ensure that we take all reasonable steps to safeguard the position of existing policy holders. This is an inevitable but unfortunate outcome for all concerned.”
In a statement on Sunday, an underwriting agency owned by Zurich that wrote business on behalf of Enterprise said that it would refund outstanding premiums to the affected motorists who are insured by the insolvent firm.
A spokesman for Wexford-based Wrightway Underwriting said a “significant” amount was involved in the reimbursements, the Irish Times reported.
“Wrightway has committed to helping its broker clients deal with affected policy-holders and, with this in mind, Wrightway has decided to make an ex gracia payment to its brokers to pass onto their policy holders which is equal to the value of the premiums from now until the end of their current policy contracts,” the company said.
Enterprise assured that existing insurance policies remain in force and policyholders are not required to take any action at the moment.
Motorists who are still insured with the now collapsed Enterprise Insurance have been warned to get replacement cover by the end of October.
It comes after the International Monetary Fund said this week that motor insurance in Ireland costs four times the European average.
Gibraltar-based Enterprise collapsed in July affecting 14,000 drivers in this country.
Now its provisional liquidator Frederick White, of Grant Thornton in Gibraltar, has written to brokers warning them that he plans to terminate all Enterprise policies by October 26 next.
However, it is understood most Irish motorists that were insured by Enterprise got replacement cover as soon as news broke of the problems with the company.
Wexford-based Wrightway Insurance, the underwriting agency that wrote business in Ireland through brokers on behalf of Enterprise, refunded outstanding premiums after the company went bust.
Enterprise Insurance also wrote business in the UK, France, Italy, Greece and Norway.
A statement published by the Central Bank here states: “The provisional liquidator for Enterprise Insurance Company plc (Enterprise) has today notified all brokers that he will present his report to the Supreme Court in Gibraltar on 26 October 2016, when he will recommend that a liquidator be appointed to Enterprise.”
The provisional liquidator has also indicated that all motor insurance policies will no longer be valid as and from 26 October, the Central Bank said.
“While policies will remain in effect until that date, the Central Bank strongly recommends that Enterprise policyholders immediately contact their insurance broker or an insurer directly to seek alternative insurance cover.”
As Gibraltar does not have an insurance compensation fund, it is expected that the Motor Insurance Bureau of Ireland will have to pick up the tab.
Enterprise Insurance Goes Bust was part of a parent company under the name of Enterprise Holdings who had numerous companies involved within the insurance company.
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