21 April 2004

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No light at end of tunnel for Independent Insurance creditors

By Kurt Sansone

Policy holders still owed money by Micallef Insurance after the failure of UK-based Independent Insurance in 2001 are in for the long haul as funds held by the Maltese financial authorities will not be released until liquidation proceedings in the UK are complete.
Policy holders at the time of the crash and who are owed a refund and garage owners owed money for repairs conducted on claims made through Independent Insurance are still in the dark on when they are to receive payment. The Malta Financial Services Authority is not in a position to say when creditors will be paid the money due to them. “Unfortunately, neither the liquidators nor the MFSA are in a position to say with certainty when this will happen. Although a provisional list of creditors has been prepared, there are a number of court cases involving Independent,” an MFSA spokesperson told The Malta Financial and Business Times.
The fluid situation means that not even the exact amount of liability, which may have to be paid is not yet quantified. “Once these cases are concluded or - as the case may be - out of court settlement is reached, and an exact amount is established, payment to creditors (including claimants and policyholders) will be made. If the funds of Independent held in Malta are insufficient to meet all such payments, pro-rata payments will be made,” the MFSA spokesperson said.
On 14 June 2001, the UK-based Independent ceased to carry on business of insurance and some days after that, proceedings were initiated in the UK to wind-up the company on the basis that it was not able to pay its liabilities in full. To this effect, the UK Court appointed joint provisional liquidators.
Independent was represented in Malta by Micallef Insurance Agency Limited and the British company held funds in Malta in terms of Maltese law.
“These funds _ which are pledged in favour of the MFSA _ will only be used towards the payment of approved fees, claims or return premiums arising from Independent’s business in Malta. The Authority confirms that it will eventually release the funds of Independent maintained in Malta once all claims, return premiums (that is premiums for policies on which a refund is due) and other liabilities (such as expenses to garages for services rendered on motor vehicles in respect of claims approved by Independent) have been agreed to ensure that the funds available are distributed equally among all bona fide creditors,” the MFSA spokesperson told The Malta Financial and Business Times.

kurt@newsworksltd.com



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