Insurance claims frozen as buyers are sought: The MMI affair

MUNICIPAL Mutual Insurance is suspending the payment of claims for a week while buyers are sought for the saleable parts of the business. However, Prime Health, the medical fees insurance arm, and Prosperity Life, which sold life insurance, will continue to pay claims.

MMI had 500,000 customers with car insurance and another 500,000 with household policies, mostly bought through block arrangements. Some council house tenants were sold contents policies through local authorities which had links with MMI.

The Cheltenham & Gloucester Building Society had 216,000 borrowers with buildings, or combined buildings and contents policies, with MMI.

These were switched yesterday to General Accident which has agreed to take on outstanding claims. Home owners who pay their premiums monthly will be covered under the same terms for the same premiums. A spokesman for Cheltenham & Gloucester said that the September premiums had not yet been handed over to MMI and these would be held 'until the situation is clearer'.

Norwich & Peterborough Building Society has also managed to switch its 22,000 buildings and contents policyholders to another insurer - Norwich Union, which already dealt with other N & P borrowers. Claims already lodged would be dealt with by MMI eventually.

The Automobile Association, which has 80,000 motorists and 300,000 householders with contents insurance partially underwritten by MMI, stopped using it for new business at lunchtime yesterday - before the formal MMI announcement. 'I don't think we are going to see a Vehicle & General-type crash,' an AA spokesman said, 'but we thought it wise to cease renewals.'

The AA's Homesure contents policy is 25 per cent underwritten by MMI. Policyholders continue to be covered and should submit claims as normal. But they should expect some delay in payment.

More than 120,000 disabled motorists, who lease their vehicles from Motobility, a charity approved by the Government, were among those hit by the freeze.

Douglas Campbell, president of the Disabled Drivers' Association, said he feared that some disabled drivers might wrongly believe their insurance policy was not valid and stop using their transport.

He was pressing Motobility to implement an immediate transfer to Eagle Star insurance and to set up a hotline for disabled drivers.

Motobility vehicles being bought through hire purchase and insured individually are not affected.

Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Lead Software Developer

£35000 - £40000 per annum: Recruitment Genius: This is an excellent opportunit...

Recruitment Genius: Trainee Case Handler / Probate Assistant

£15000 - £18000 per annum: Recruitment Genius: A Trainee Case Handler/Probate ...

Recruitment Genius: Outbound Telesales Executive - OTE £30,000

£16000 - £20000 per annum: Recruitment Genius: This precious metal refining co...

Recruitment Genius: Senior Conveyancing Fee Earner

£20000 - £29000 per annum: Recruitment Genius: A Senior Conveyancing Fee Earne...

Day In a Page

Syrian conflict is the world's first 'climate change war', say scientists, but it won't be the last one

Climate change key in Syrian conflict

And it will trigger more war in future
How I outwitted the Gestapo

How I outwitted the Gestapo

My life as a Jew in wartime Berlin
The nation's favourite animal revealed

The nation's favourite animal revealed

Women like cuddly creatures whilst men like creepy-crawlies
Is this the way to get young people to vote?

Getting young people to vote

From #VOTESELFISH to Bite the Ballot
Poldark star Heida Reed: 'I don't think a single bodice gets ripped'

Poldark star Heida Reed

'I don't think a single bodice gets ripped'
The difference between America and Israel? There isn’t one

The difference between America and Israel? There isn’t one

Netanyahu knows he can get away with anything in America, says Robert Fisk
Families clubbing together to build their own affordable accommodation

Do It Yourself approach to securing a new house

Community land trusts marking a new trend for taking the initiative away from developers
Head of WWF UK: We didn’t send Cameron to the Arctic to see green ideas freeze

David Nussbaum: We didn’t send Cameron to the Arctic to see green ideas freeze

The head of WWF UK remains sanguine despite the Government’s failure to live up to its pledges on the environment
Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Set in a mythologised 5th-century Britain, ‘The Buried Giant’ is a strange beast
With money, corruption and drugs, this monk fears Buddhism in Thailand is a ‘poisoned fruit’

Money, corruption and drugs

The monk who fears Buddhism in Thailand is a ‘poisoned fruit’
America's first slavery museum established at Django Unchained plantation - 150 years after slavery outlawed

150 years after it was outlawed...

... America's first slavery museum is established in Louisiana
Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

The first 'American Idol' winner on how she manages to remain her own woman – Jane Austen fascination and all
Tony Oursler on exploring our uneasy relationship with technology with his new show

You won't believe your eyes

Tony Oursler's new show explores our uneasy relationship with technology. He's one of a growing number of artists with that preoccupation
Ian Herbert: Peter Moores must go. He should never have been brought back to fail again

Moores must go. He should never have been brought back to fail again

The England coach leaves players to find solutions - which makes you wonder where he adds value, says Ian Herbert
War with Isis: Fears that the looming battle for Mosul will unleash 'a million refugees'

The battle for Mosul will unleash 'a million refugees'

Aid agencies prepare for vast exodus following planned Iraqi offensive against the Isis-held city, reports Patrick Cockburn