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Jul 22 - FSC Orders Local Insurance Firm Enterprise To Cease Trading

The Gibraltar Financial Services Commission has today intervened in the operations of Enterprise Insurance Company PLC, ordering the company to cease trading after the company admits it is insolvent and hasn't been able to secure additional funding. 

On 22nd July 2016 the Commission has, under section 105 of the Financial Services (Insurance Companies) Act, directed Enterprise to cease effecting any new contracts of insurance. 

The Commission has also issued certain directions under Section 100 of the Financial Services (Insurance Companies) Act prohibiting Enterprise from making any payments unless previously authorised by the Commission, in order to protect the assets of the Company.

The Commission is now taking steps to issue winding up proceedings with the cooperation of Enterprise to petition for the winding up of the Company. It is the intention to issue an application for the appointment of a provisional liquidator.

The Commission is taking this action as Enterprise has told the Commission the Company is insolvent and has not been able to secure additional funding.

The Commission is taking appropriate steps to protect policyholders. The Commission is notifying the European Insurance and Occupational Pensions Authority (EIOPA), and the relevant financial services regulators and compensation schemes in France, Greece, Italy, Norway, Ireland and the UK, where Enterprise has written business.

Enterprise has been under close supervision from the Commission due to concerns about its financial position. In recent months the Commission has been seeking assurances from Enterprise about its financial position. The Commission has required Enterprise to provide independent verification of important items. Enterprise has been working with its independent advisers to provide the relevant information to the Commission.

Recently Enterprise provided the Commission with the indicative outcome of the independent review. The impact of the independent review is a severe deterioration in the Company’s position and Enterprise is insolvent. The shareholders of the Company have been unable to contribute additional capital into the company, and in the interests of policyholder protection the Company has requested that the Commission takes steps to control the activities of the Company including issuing winding-up proceedings. 

Samantha Barrass, GFSC CEO, says: “We have been working closely with Enterprise since the beginning of the year. We have been working with the Company using the new powers available to the Commission under Solvency II to ensure the Commission has the right information to support our supervision. The situation demonstrates the importance of receiving independent verifiable information. This has enabled us to act promptly avoiding unnecessary harm to policyholders.”

Peter Taylor, Director of Legal, Enforcement and Policy, says: “The Commission initiated action against Enterprise at the beginning of July. The Company has endeavoured to find a way out of its predicament but has not been able to do so. Once we had seen the outcome of the independent review of Enterprise’s position Enterprise advised the Commission it was insolvent. We have moved very quickly to ensure that we take all reasonable steps to safeguard the position of existing policy holders. This is an inevitable but unfortunate outcome for all concerned.”

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