Supplier failure insurance company loses licence
One of the few providers of supplier failure insurance to the UK travel industry has had its licence suspended after it was allegedly unable to meet claims from a failed property development in London’s Docklands.
Northern & Western Insurance Company is now unable to issue new policies following the suspension of its licence by the regulatory authorities in Nevis, where it is based.
Its UK agent, Guarantees & Bonds, has brought in another Nevis firm, Commodore Insurance Company, as an alternative. Like NWIC, Commodore is not regulated in the UK.
Guarantees & Bonds managing director Philip Radley said the risk for holidays already sold but not yet taken was being transferred from NWIC to Commodore for those clients who remain with Guarantees & Bonds.
However, he said two of its largest customers – Advantage Financial Services and broker Rock Insurance – have moved to New Zealand firm CBL Insurance, which is regulated by the Bank of Ireland.
They have set up a management company, MGA Cover Services, with former Rock consultant Lawrence Assock working full time and Rock director John Buckingham as non-executive chairman.
Radley said that Rock and Advantage represented about a third of its business for supplier failure insurance, with Advantage by far the largest customer.
He said Advantage members had approximately 15,000 holidays insured with NWIC while Rock had around 6,000 to 7,000.
"For all our clients who have chosen to stay with us we have transfer the risk for any unused premiums to Commodore, but Rock and Advantage declined," said Radley.
Linsey McNeill
Editor Linsey McNeill has been writing about travel for more than three decades. Bylines include The Times, Telegraph, Observer, Guardian and Which? plus the South China Morning Post. She also shares insider tips on thetraveljournalist.co.uk
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