Insurer submits application to the Supreme Court of Gibraltar to appoint an Official Receiver and place the business into liquidation
Gibraltar-based insurance company, LAMP has submitted an application to the Supreme Court of Gibraltar for an official receiver to be appointed and place the company into liquidation.
The directors have taken this action as the company is insolvent and has been unable to secure additional funding. A date has been set for the hearing, which is due to take place on 31 May 2019.
LAMP provided general insurance products including legal expenses, healthcare, general and warranty insurance to policyholders in the UK, Europe and Asia.
The Financial Services Compensation Scheme (FSCS) has been notified and it says it “will be working with the appointed liquidator to protect eligible UK policyholders.”
Implications for UK policyholders
Policyholders need to be made aware that all policies are still currently valid, but the company is not in any position to pay claims.
Brokers are urged to advise customers on the next steps, as it may be considered prudent to replace the cover.
The official receiver will work to collect the assets of LAMP with the objective of making distributions to insurance creditors, including policyholders.
However, the Gibraltar Financial Services Commission (GFSC) said that “it is likely that the amount recovered will not be sufficient to meet the amount due to policyholders in outstanding claims and unearned premiums.”
Alternatives - sale?
LAMP is still actively considering all options, including a potential sale of the business. Any such solution would, however, be subject to the acquirer completing its due diligence, regulatory approval, and making an unconditional financial commitment prior to the 31 May 2019 hearing date.
In the event that such a solution is reached, the GFSC will provide and update.
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