Some 40,000 customers of Tribune Risk and Insurance Services, a Scottish insurance company, who had been told they could "Consider it Covered", were yesterday informed that the company had been put into liquidation and their policies are worthless.
PricewaterhouseCoopers were yesterday appointed provisional liquidators of Tribune Risk and Insurance Services, based in Dalkeith, Midlothian. "Our initial investigations have shown there are some 40,000 individuals who innocently assume they have cover when in fact they do not. We would urge all policyholders with a Tribune household insurance policy to contact their insurance broker immediately," Dan Schwarzmann, a partner at PwC said yesterday.
Tribune was acting as an insurance agent and was supposed to place insurance policies it sold with authorised underwriters. However, the Financial Services Authority became aware this week that the company was not doing so, meaning it was operating illegally. Customers of the company, whose slogan was Consider it Covered, did not have proper insurance cover.
"Tribune offered various types of insurance without authorisation. The company has no reserves or provisions in place to meet any claims that might be made or have already been made," a statement from the FSA said yesterday. It brought in the liquidators on Wednesday, who are assessing whether any assets can be recovered from the company.
As the company was not authorised by the FSA, customers do not have access to the Financial Services Compensation Scheme. This provides policyholders with some redress if their company becomes insolvent.
Tribune had been paying claims out of the premiums it collected, a total of £7.4m since it began operating in 2000, but has become unstuck as the number of claims rose. Tribune customers have more than £20bn insured with the company, but initial estimates by PwC suggest that only about £2m of claims are outstanding.
About 70 people work at the company and are likely to lose their jobs.
Tribune was run by Jack Walker, who claims to have more than 30 years of experience in the insurance industry.
The FSA is continuing to investigate.Reuse content