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
“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.
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