Insurer Goes Into Liquidation
Based on the principal ‘if things seem and sound too good to be true, they probably are’ this could be an excellent example within the insurance sector.
Lemma Europe Insurance Company Ltd has gone into liquidation, the Gibraltar Financial Services Commission has confirmed.
The Insurer provided many elderly Park Home residents a specialist scheme for Britannia Parks Ltd (before it was recently acquired by the Regency Park Life Group) through Cobra Insurance Brokers and provided residents on Britannia Parks and Kings Park Village a bespoke Park Home Insurance Policy with ‘guaranteed savings for Kings Park Village Residents’ with options of Essential, Superior and Ultimate Cover. Despite this, many of these residents plus other policyholders whether it were home insurance, equine insurance, boat and yacht insurance and so on appear unsure as to whether they are still insured or not.
Just because an insurer offers every conceivable benefit at a fantastic premium, things may not be all what it could be. This is an excellent example of an insurer (based in Gibraltar, with their reinsurer being a sister company based in Kiev) avoiding UK regulation. My Static Caravan Insurance believe that a UK based insurer (in our case a Lloyd’s Insurer) with a realistic yet competitive premium, with UK regulation is what all policyholders should opt for, not just cheap premiums.
As for Lemma Insurance, Frederick David John White of Grant Thornton Accountants (Gibraltar) was appointed provisional liquidator by the Supreme Court of Gibraltar.
The Gibraltar Financial Services Commission had made a request after an investigation uncovered a detiorattion in Lemma Europe’s finances and corporate governance.
On the 17th September the Court granted the GFSC leave to do so, and a petition was presented to the court on 19th September. A summons was also issued for the appointment of a provisional liquidator.
On the same day, and in order to protect the assets of Lemma pending the appointment of a provisional liquidator for the company, the GFSC issued a further direction to Lemma that the company may not make any payments from its bank accounts.
On the 28th September the Supreme Court of Gibraltar heard the petition and appointed White as provisional liquidator of Lemma Europe Insurance Company.
The GFSC stated that is was forced to protect policyholders by seeking the company’s liquidation after shareholders refused to contribute additional capital and one of its major reinsurers and sister company, the Ukranian company Joint Stock Insurance Company Lemma, failed to honour its reinsurance agreements with Lemma Europe and stopped all reinsurance claims payments to the company.
This placed Lemma Europe’s finances on an ‘unviable footing’. The provisional liquidator has been granted very wide powers by the court, enabling him to do whatever he considers necessary to protect the interests of policyholders.
A GFSC spokesman said ‘The company’s immediate problems and the need for the commission’s actions are external to Lemma Europe and Gibraltar in that, in the opinion of the commission, they are primarily the result of the actions and defaults of a related insurance company. Lemma Ukraine, which is located in Kiev.
If you would like a quotation for Static Caravan Insurance, contact My Holiday Home Insurance for a quotation with our Lloyd’s insured scheme.
