The Gibraltar Supreme Court appointed PriceWaterhouseCoopers Ltd. Gibraltar's Edgar Lavarello and PricewaterhouseCoopers LLP's Dan Schwarzmann joint administrators of Elite Insurance Co. Ltd.
Elite Insurance provided insurance products for the commercial and retail markets across Europe, including after-the-event legal expense insurance. It ceased to be authorized to write new business or renew existing business in July 2017, and it was acquired by Armour Group Ltd. in January 2018, with Armour Risk Management Ltd. taking over its operational management.
A majority of the company's underwritten insurance business was reinsured by CBL Insurance Ltd., which was placed into liquidation in November 2018.
Elite Insurance became insolvent in November 2018 as a result of continued reserve deterioration in certain of its business lines and issues with the collection of its asset base, together with CBL Insurance's liquidation. The company received a court order in January to roll out a scheme of arrangement that would help it maintain its solvency and pay valid claims in the ordinary course of business after it failed to meet its regulatory capital requirement.
Lavarello and Schwarzmann said they retained Armour to ensure the orderly conduct of the run-off. The administrators also secured Elite Insurance's cash assets and investments and interacted with the U.K.'s Financial Services Compensation Scheme to discuss compensation for policyholders in the U.K. and possible policyholder protection for policyholders in other European jurisdictions.
The FSCS will fully meet Elite Insurance's liability for claims made under U.K. compulsory insurance, like third-party motor and employers' liability, with no limit. For other insurance claims, the FSCS will cover 90% of the company's liability.
The FSCS compensation is only applicable to private individuals and small businesses or partnerships and for policyholders of compulsory general insurance contracts.