Small firms protected after insurer administration
The Financial Services Compensation Scheme (FSCS) has stepped in after the collapse of Irish professional indemnity insurer CBL Insurance Europe DAC (CBL).
CBL has been under administration since 12 March 2018 and was directed to stop paying claims by the Central Bank of Ireland on 9 December 2019.
It is thought that around 300 UK firms of solicitors are insured by the business, which is expected to go into liquidation in the coming weeks after the Central Bank of Ireland lodged a petition with the Irish High Court to seek a winding-up order on 20 February 2020.
The FSCS is understood to be working closely with CBL’s administrator and the Central Bank of Ireland to make sure that any eligible policyholders are protected.
FSCS will protect most UK-based customers of CBL who are either individuals or small businesses with an annual turnover of less than £1m.
The FSCS was established in 2001 under the Financial Services and Markets Act 2000 to protect customers of financial services firms that have failed.
In 2018-2019 the fund paid out £473m to 425,760 customers of failed firms.