Over 300 brokers agree to pay Indie millions to liquidator
At least 300 Independent Insurance agency brokers are set to agree a compromise with Independent's liquidator, Pricewaterhouse-Coopers (PWC), over the return of millions of pounds of premiums.
The move follows a row between the liquidator and the British Insurance Brokers' Association (Biba). The broker body advised members to retain Independent money, while PWC threatened legal action to recoup the cash.
PWC's Dan Schwarzmann insisted brokers' agency contracts included the return of premiums and the commission on returned premiums, while Biba chief executive Mike Williams was adamant brokers should only return the pro rata premium up to the date of cancellation, if at all.
Most brokers spent any premium they held on replacement cover for their clients, often putting the commission toward the higher cost of the replacement cover.
But Schwarzmann said he was hopeful of completing a "compromise" deal with at least 300 brokers in the near future, after seven regional brokers approached him on a peace-making mission.
Schwarzmann agreed to hammer out a deal if brokers divulged the details of the premiums held, which is said to amount to many millions.
The seven brokers spread the word among brokers in their regions. As a result, about half the brokers holding premiums then forwarded their details to Biba to be passed confidentially to PWC.
The 300 brokers are believed to hold about half of the unreturned premiums.
Schwarzmann said he would much prefer to resolve the situation amicably, without either side resorting to litigation.
"I'm really pleased with the response we've had from the broking community and I'm hopeful we'll be able to come to some solution and put this behind us," he said.
Schwarzmann said brokers that were not among the 300 interested in taking part in the compromise deal could pass their details on to Biba, to be passed on to PWC.
He said he had not yet dealt with Independent's small number of non-agency brokers.
Williams said he had yet to see the compromise being drawn up by PWC. "I'm still getting several calls every day, asking what's happening with PWC, but I've not heard anything," he said.
He said Biba had not softened its stance on the non-return of premiums.
Meanwhile, Schwarzmann said Independent's liquidation was progressing as well as could be expected. "Aurora [Independent's run-off company] has settled down quite nicely,' he said.
He said return of premiums to protected policyholders was likely to happen in the next quarter.
