Despite the collapse of their indemnity insurer,
policyholders of CBL Insurance Europe dac (CBLIE) will
continue to be covered, it has been revealed.
However, according to the Solicitors Regulation
Authority, in a report from The Law Society Gazette ,
clients cannot obtain a new policy with the company
since the direction that CBLIE cannot write any business
remains in force.
On February 26, the Central Bank of Ireland made an
application to the Irish High Court to have a provisional
administrator appointed to the firm . The bank had
already instructed it to cease writing any business until
further notice.
Explaining its move against the insurer, the Irish Central
Bank said that CBLIE had failed to make adequate
provision for its debts, including contingent and
prospective liabilities, and had become unable to
comply with its regulatory requirements in a material
respect.
The publication also said that around 200 England and
Wales firms are covered by the Dublin-registered
company.
On March 12, the central bank confirmed that
administrator KPMG was appointed to CBLIE.
In a statement, the SRA, meanwhile, said: “As was the
case with a similar situation in 2010, an administration
order under Irish legislation does not constitute an
‘insolvency event’ under the SRA Indemnity Rules 2013.
There is, therefore, no requirement at this stage for firms
insured with CBLIE to seek replacement qualifying
insurance within 28 days of an ‘insolvency event’.”
Moreover, the regulator reportedly added that it will
continue to monitor the situation and will advise of any
significant developments or any change in its view.
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