Car insurance company collapsed?

pandapeepers

Hi,
I've just received this email about my van insurance and I don't think they'll answer the phone until Tuesday to answer questions.

It's totally confused me, do I still have insurance to drive or not? It says the insurance remains in force but if I had an accident and was found at fault when it says they can't pay new claims is it down to me?
They said they may find another insurance after 31st may or I can find other cover? I thought you couldn't have 2 policies running at once on one vehicle?
Also I pay monthly am I right in assuming if I need to get another insurance now, I will still need to finish paying for this one as it will likely be with a credit company separate to them?

Thanks for any advice in advance.
Here is the full email.

Dear Miss

---

It is with deep regret that I am writing to inform you that the insurer your policy is underwritten by (LAMP Insurance Company) has submitted an Application to the Supreme Court of Gibraltar to appoint an Official Receiver and place the Company into liquidation. That Application was submitted on Thursday 16 May 2019 and the Court will hear the Application on Friday 31 May 2019.

LAMP have further stated their cashflow projections show that they have insufficient liquid assets to enable them to pay their debts as they fall due and there is no reasonable prospect of obtaining sufficient liquid assets in sufficient time to enable it to do so. Consequently, LAMP is insolvent.

We, as in now4cover, only became aware of this late on Monday evening this week. Since then we have been working tirelessly with the insurer, the relevant regulatory bodies and potential replacement insurance providers to understand more details about how this affects our customers. I can now confirm, as an interim note, the following:

• In the run-up to the 31st May LAMP are 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 forthcoming, an update will be provided on LAMP’s website. We will update you further if more information is received.

• In the meantime, LAMP have stated that they are currently unable to meet any further claim payments. The full position will only be determined after the 31st May and the appointment of a liquidator.

• Now4cover are in discussions with a number of parties to replace LAMP.

LAMP’s insurance policies that have not expired, remain in force. However, as LAMP is insolvent it is unable to make any claim payments. The Official Receiver will work to collect the assets of LAMP with the objective of making distributions to insurance creditors, including policyholders. It is likely that the amount recovered will not be sufficient to meet the amount due to policyholders in outstanding claims and premium refunds.

In the event LAMP is unable to meet its obligations, the Financial Services Compensation Scheme are there to provide financial support. You can find out more at (fscs link) . now4cover will support you through this process if you are required to make a claim for any premium paid or claims payments due. The Financial Services Compensation Scheme has offered assurances that it will be working with the appointed liquidator to protect eligible policyholders.

At this point in time you should carefully consider your options. You may wait for the outcome of the hearing on the 31st May, for which we will make you aware. Subject to the outcome of the hearing we may be able to provide an alternative insurer but we are unable to guarantee that. Finally you may choose to purchase cover elsewhere.

You will be unable to make any amendments or cancellations to your existing policy until the outcome of the hearing by the Supreme Court of Gibraltar is known. In the event you need to make a claim you should still login at (link) and click claims, following the normal process. Unfortunately, claims processing and handling will be delayed until after the hearing.

I apologise unreservedly for the inconvenience this will undoubtedly have caused and of course this is very distressing and unwelcome news. Now4cover are proud of the service they have so far delivered to customers on behalf of LAMP. We have all been let down.

As more information arrives we will keep you updated.


Yours sincerely,
Michael Muzio, Chief Executive of now4cover

Johno100

pandapeepers wrote: »

It's totally confused me, do I still have insurance to drive or not?

Yes.

pandapeepers wrote: »

It says the insurance remains in force but if I had an accident and was found at fault when it says they can't pay new claims is it down to me?

Nope, if your insurer can't meet the claim the Financial Services Compensation Scheme (FSCS) would meet any claim.

pandapeepers wrote: »

They said they may find another insurance after 31st may or I can find other cover?

Yes, in the event of your insurer being formally wound up on that date the FSCS will appoint another insurer to take over existing policies or you'll be able to cancel your policy and go elsewhere.

pandapeepers wrote: »

thought you couldn't have 2 policies running at once on one vehicle?

You won't have two policies, your existing policy will be replaced by one with the substitute insurer or you'll cancel and go elsewhere.

pandapeepers wrote: »

Also I pay monthly am I right in assuming if I need to get another insurance now, I will still need to finish paying for this one as it will likely be with a credit company separate to them?

You don't need to get another insurance policy now.

jonfrewin

Thanks for your helpfully reassuring responses. I am in the same boat but with buildings and contents insurance. I was going to go ahead and buy replacement cover today. Would you recommend holding off doing that for now? The email I received was very similar.
Thanks!

DUTR

jonfrewin wrote: »

Thanks for your helpfully reassuring responses. I am in the same boat but with buildings and contents insurance. I was going to go ahead and buy replacement cover today. Would you recommend holding off doing that for now? The email I received was very similar.
Thanks!

There is nothing to stop you looking at who can offer you cover from the future dates, the final decision is always yours.

Manxman_in_exile

I would have thought you both must be covered as Johnno100 says.


The only question I would have is about the underwriters being in Gibraltar(?). Does that make a difference re FSCS as a safety net? Also the letter refers to the Official Receiver - do they have jurisdiction over a Gibraltar company or does it refer to the Gibraltar OR (it also refers to the Gibraltar Supreme Court which I would have thought was the Privy Council here)?


Still I'm sure you must be OK as this must happen quite a lot - you can't be left without insurance. That ought to be now4cover's problem, not yours.

Car_54

Manxman_in_exile wrote: »

I would have thought you both must be covered as Johnno100 says.


The only question I would have is about the underwriters being in Gibraltar(?). Does that make a difference re FSCS as a safety net? Also the letter refers to the Official Receiver - do they have jurisdiction over a Gibraltar company or does it refer to the Gibraltar OR (it also refers to the Gibraltar Supreme Court which I would have thought was the Privy Council here)?


Still I'm sure you must be OK as this must happen quite a lot - you can't be left without insurance. That ought to be now4cover's problem, not yours.

I'd suggest it's very much the OP's problem. Whatever now4cover's legal or moral obligations, it appears from their website that they put all of their business through LAMP. That means they may have to seek alternative cover for all of their customers at short notice, with (I'd guess) very limited resources.


OP - there is nothing to stop you having two policies on the same vehicle


Manxman in exile: the letter refers to an Official Receiver, not the. And the Gib Supreme Court is in fact far from supreme: there is a court of appeal above it, and then the Privy Council.