Andrew Stoneman and Jeff Boucher, the Managing Directors of the Corporate Investigation Restructuring Consulting Practice and Kroll (Gibraltar) Limited, have been appointed as joint directors of the company.
The Financial Conduct Authority (FCA) also issued a statement on Monday that MCE Insurance operates in the country on a free-of-service basis, allowing UK-based clients to hold policies with the company. The policies were sold through its Northamptonshire broker MCE Insurance Ltd (MCE UK), which also provides various administrative services, including claims management. Kroll noted that MCE UK is not under management.
The FCA added that MCE Insurance had stopped writing new policies for UK customers on November 05. However, existing insurance policies remain valid and valid until their renewal dates.
“MCE UK and joint officers will liaise with the Financial Services Compensation Scheme (FSCS) regarding eligible insurance claims and, in due course, other statutory compensation schemes for other countries as appropriate,” Kroll said in a statement. “The joint officials understand that MCE UK is working closely with an alternative provider with the aim of being able to quote future insurances to existing customers.”
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In a separate statement, the FSCS said that any new policies taken from MCE Insurance since November 05 have been underwritten by a different provider and are not affected by the changes.
“We are in the process of quantifying the number of UK clients affected by the failure of MCE Insurance Limited,” said Sarah Marin, chief client officer at FSCS. “We are working closely with officials to make sure all eligible policyholders are protected.”
It added: “The FSCS will protect the majority of UK-based MCE Insurance Company Limited clients who are individuals or small businesses with annual turnover of less than £1 million.” “We want to reassure clients of MCE Insurance Company Limited that their claims will continue to be considered against the terms of their policy and that the FSCS will step in to protect eligible clients.”
Julian Edwards, chief executive of MCE Insurance, condemned the GFSC’s move, calling it “the latest in what appears to be a retaliation against MCE UK-Co and act to sabotage a successful portfolio transfer”.
“The GFSC applied capital additions to Green Realizations No. 123 Limited (GR, officially MCE Insurance Company Ltd.), which in turn provided a structured and solvent profile to management,” he said in a statement. “MCE UK has taken the decision to restructure and convert our portfolio to a UK insurer, and the GFSC has been informed of this.”
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He continued, “We took the advice and believe that the State Financial Services Commission acted negligently and in bad faith, which could lead to job losses and possibly bankruptcy of GRs.” “The Government Financial Services Commission (GFSC) applied capital additions to financial structures it had previously proposed and/or approved, and subsequently worked with MCE to implement them.”
Edwards added that the GFSC’s position was “not in the best interests of policyholders or claimants.”
“Regardless of whether the GRs are in agreement with the capital additions in the GFSC or not, the MCE has made proposals to fill any MCR deficit immediately and provide a surplus with respect to the SCR,” he said. “These proposals were based on solvency calculations conducted by Aon Global Risks Consulting, Robus Insurance Managers and GFSC. The recovery program at MCE would have injected £20.5 million into GR. The Government Financial Services Commission (GFSC) rejected these recovery measures for reasons we cannot understand it.”
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