§ Mr. Oakesasked the President of the Board of Trade if he will make a statement on the recent collapse of the Craven Insurance Company; and what steps were taken by his Department to protect the public.
§ Mr. CroslandOn 3rd August, 1967, officers of the Board of Trade were appointed under Section 109 of the Companies Act, 1967, to make inquiries of the company.
On 15th August, the Board, in accordance with Section 68 of the Act, gave notice of their intention to restrict the business of the company and invited the company to make, within one month from the date of the service of the notice, any representations which it desired to make with respect to the proposed exercise of the Board's power under Section 68. The company represented that it was solvent and undertook to engage independent accountants with a view to establishing its solvency.
As evidence to the satisfaction of the Board had not been produced, they presented a petition to the court on 12th December to wind up the company on the ground that it had not the margin of solvency required under the Insurance Companies Acts. The court dismissed the petition on 9th February on certain undertakings from the company, including an undertaking that it would increase its share capital by £124,000. In fact, £200,000 of additional capital was paid up on 16th February by different parties from those mentioned in the course of the hearing.
After discussion with the Board the company on 29th April presented its own petition to the court for the compulsory 233W liquidation of the company on the ground that its liabilities exceeded its assets. The petition is due to be heard on 27th May. On the application of the company the Senior Official Receiver has been appointed provisional liquidator.
On the advice of the Board of Trade the company has notified its policyholders of the cancellation of their policies and has advised them to insure immediately with other insurers.