FSCS update on Lemma Europe Insurance Company Ltd
5th October 2012
The Financial Services Compensation Scheme (FSCS) is stepping in to help customers of Lemma Europe Insurance Company Ltd after declaring the firm in default. It is in discussions with Grant Thornton, the provisional liquidators in Gibraltar, about the recent failure of the firm.
Lemma was an FSA authorised firm, so claims against the company may be protected by FSCS, which protects policyholders UK risks. The firm was regulated in Gibraltar and was operating in the UK under European passport arrangements.
The maximum level of compensation for claims against firms is 90% of the claim with no upper limit. FSCS covers certain compulsory insurance (such as employer’s liability and motor third party risk) is covered in full.
Early indications are the failure will affect about 7,000 UK policyholders. It is too early to predict what the implications of the failure might be for the levy. However, the Scheme will probably need to raise a levy to cover the costs.
Lemma sold a range of products through brokers in the UK which FSCS may protect including:
- General Property
- General Public Liability
- UK Employers Liability
- Fine Art and Jewellery
- Legal Expenses
- UK Solicitors' Professional Indemnity (for businesses with a turnover of £1m or less per year)
FSCS will pay claims and is prioritising those with emergency claims.
We have briefed the Association of British Insurers and the British Insurance Brokers Association and will publish updates on our website as necessary.