Creditors of Independent Insurance stepped up their campaign for compensation yesterday with plans to start legal action against the Financial Services Authority by the end of the month.
Class Law, the solicitors firm acting for creditors of the collapsed insurer, said it would formally approach the High Court to try to force the FSA to disclose confidential documents.
Class Law argues the regulator was negligent in policing Independent, which collapsed in July 2001, leaving policyholders and other creditors with hundreds of thousands of pounds of losses.
The FSA came under fire after it emerged the French regulator, the Commission de Controles des Assurances, alerted its British counterpart to Independent's lack of financial strength in October 2000 and again in January 2001. Independent was banned from writing new business in France in March 2001.
Stephen Alexander of Class Law said: "The FSA asked Independent to scale back its business in the UK but did not make sure that it did so. In fact we have evidence that Independent was increasing its business."
The FSA said it was already aware of the company's inadequate capitalisation when contacted by the French regulator.Reuse content