RE WHITELEY INSURANCE CONSULTANTS

[2008] EWHC 1782 (Ch), Chancery Division, Mr Justice David Richards, 25 July 2008

Insurance – Intermediary carrying on insurance business without authorisation to do so – Intermediary becoming insolvent – Valuation of claims against intermediary – Financial Services and Markets Act 2000, sections 19, 20, 26 and 28 – Insurers (Winding-up) Rules 2001

WIC, an intermediary, was granted the power to issue travel policies on behalf of insurers until 2004. In that period it sold policies which it was not authorised to sell, and following the termination of the agency it continued to sell policies in the names of those insurers and also in the names of fictional insurers. Following the extension of the Financial Services and Markets Act 2000 to intermediaries on 14 January 2005, WIC obtained authorisation to carry on insurance business as an intermediary. WIC was subsequently wound up following investigation by the Financial Services Authority. In the present case liquidators applied to the court for directions on the assumptions to be made as to the value of the claims of policyholders. The court ruled as follows.