Chris Wheal reports on the continuing Independent fraud case
The jury in the Independent trial was sent home early on Tuesday and was given Wednesday off after the prosecution finished its case.
The remaining few jurors must have needed a break after listening to several days of actuarial detail from former Independent staff and expert witnesses.
At one stage, when the defence was cross-examining the expert witness actuary on Tuesday, the judge inter-rupted to point out that the court had already heard the same answer five or six times.
Five different actuarial methodologies were detailed on Tuesday alone. There was also discussion about IBNR and IBNER – the difference between estimated claims and actual amounts paid out – plus loss ratios, which seemed to tie up both prosecution and defence barristers.
The long and the short of it though was that the “withheld” claims grew from a small start in 1997 to 12% of total claims in 1998, 34% in 1999 and 44% in 2000.
These claims were allegedly written on a whiteboard and not revealed to the actuaries or auditors. An example of these whiteboard claims was presented to the court, showing claims estimates during 1997 that were never included.
The company also calculated reserves based on estimated claims costs, rather than claims paid – or a combination of both – and this made the picture worse because the estimates were low and the quality of them got “weaker” in the final years before the insurer collapsed.
Even when the gap between the estimates and the actual amounts paid out became clear, the company carried on. Why that was and who was aware of it, authorised or instructed it, will be key. The defence will claim the directors would have acted sooner had they been aware things were so wrong but they did not know.
The defendants, Michael Bright, Philip Condon and Dennis Lomas, are expected to take the witness stand this week or early next week.
They deny all charges.
