§ Mr. Heddleasked the Secretary of State for Trade and Industry (1) if he will make a statement on his Department's investigations into the compulsory winding-up of the Cavalier Insurance Company, including details of the ownership of the company, and in particular its relationship with Multi Guarantee and Universal Guarantee;
(2) if he will seek powers to examine insurance policies issued through intermediary companies;
(3) if he has any plans to amend the law covering extended warranty insurance.
§ Mr. FletcherIn 1983 Cavalier Insurance Company Ltd. accepted certain extended warranty insurance business administered by Multi Guarantee Co. Ltd. Cavalier ceased to accept such business after being advised that this was outside its authorisation under insurance legislation.
During 1983 Cavalier's owners entered into agreements concerning the ownership of its shares and Cavalier made arrangements for the reinsurance of its business. In view of pending legal proceedings it would not be appropriate for me to comment in detail on these matters.
491WIn the light of information available, I concluded that the interests of consumers were best served by winding up the company. The court assented to this on 2 February 1984.
I have considered whether the Cavalier winding up reveals a need for amendment to the insurance legislation. My present conclusion is that it does not but I remain ready to make vigourous use of my statutory powers to look after the interests of consumers.
My officials are writing to retail trade associations drawing their attention to the Cavalier case, and urging them to do all they can to ensure that their members check with the Department that any insurance company offering to provide extended warranty insurance is authorised to carry out that type of business under the Insurance Companies Act 1982.