An insurance broker going out of business can mean many complications for its clients and insurance partners. William Sturge, partner at Carter Perry Bailey, tries to navigate and make sense of the complex situations that can arise when this occurs.
When an insurance broker experiences financial difficulties, are premium and claims monies in the broker’s possession protected? How can the status of the business that the broker has been handling be established?
The first solid information a client receives about his broker’s financial difficulty may be a notice that some part of the broker’s operations have been transferred to a third party.
Operating the business of insurance broking involves a great deal of time and expense, and receivers, administrators, provisional liquidators or other insolvency practitioners (IPs) often sell the company’s goodwill, make employees redundant and arrange for another firm to handle the run-off.
Brokers, Carter Perry Bailey, Insolvency, FSA