§ Mr. GardinerTo ask the Chancellor of the Exchequer (1) what plans he has to assist those companies who were policyholders of the Independent Insurance Company and who face liquidation as a result of the losses sustained by the collapse of the Independent Insurance Company; [4491]
(2) if he will establish a scheme to compensate those policyholders of independent insurance companies not protected by the Policyholders Protection Board, for losses sustained by them as a result of regulatory failure. [7062]
§ Ruth KellyThe Serious Fraud Office is investigating the events at the Independent Insurance Company, following a referral by the Financial Services Authority 18 June. The Government will not pre-judge the outcome of this investigation.
The Government are sympathetic to all policyholders who face potential hardship as a result of the provisional liquidation of Independent Insurance. I understand that the provisional liquidators are continuing to go through the process of identifying all policyholders and agreeing claims where appropriate. Many of those claims will be covered by the Policyholders Protect on Board. Claims by businesses, except for claims under compulsory insurance policies, will generally rank with other creditors of the company to be paid in due course by the provisional liquidator to the extent that funds are available.
§ Mr. GardinerTo ask the Chancellor of the Exchequer what assessment he has made of the potential conflict of interests faced by Herbert Smith Solicitors in their capacities as solicitors to the(a) Independent Insurance Company, (b) Policyholders Protection Board and (c) provisional liquidators of the Independent Insurance Company. [4490]
§ Ruth KellyAny potential conflict of interest faced by solicitors in this case would be a matter for the firm of solicitors involved and their clients. If a solicitor has acted where there is a conflict of interest, any complaint that might arise should be referred to the Office for the Supervision of Solicitors, a separate organisation set up by the Law Society for that purpose.
§ Mr. GardinerTo ask the Chancellor of the Exchequer when the FSA were informed that Independent Insurance Company's reinsurance contract of £278 million with Ireco was partially reinsured by Independent's wholly-owned subsidiary Novi Re. [6554]
§ Ruth KellyThe discussions between the FSA, the Independent Insurance Company and other individual companies that it regulates are kept confidential between the parties concerned.