The High Court has appointed Ernst & Young LLP’s Richard Barker and Simon Edel as joint administrators of East West Insurance Company Limited (EWIC), which was placed into administration yesterday (October 12).
“The firm has ceased writing any new insurance,” noted the Financial Conduct Authority (FCA) in a release, “and has been focussed on claims management and run-off. The firm had a range of insurance policies including building guarantee policies.”
It was clarified that the failure was not connected to the coronavirus pandemic. According to the FCA, a Court of Appeal ruling adversely impacted EWIC’s book of UK building defect liability and subsequently affected the company’s solvency position, rendering it unable to pay its debts.
The insurance firm’s directors, after exploring the available options, concluded that there was no viable alternative to placing EWIC into administration.
The regulator told EWIC’s customers: “If you are an East West policyholder, the administration of East West doesn’t automatically end or cancel your contract of insurance, and you’ll be covered by the Financial Services Compensation Scheme if you’re an eligible policyholder.
“The administrators will write to you in due course. They will also write to you with their proposals for the administration, usually within eight weeks of appointment.”
Meanwhile, the company continues to be regulated by the FCA and the Prudential Regulation Authority (PRA).
“It remains subject to supervisory oversight and the PRA’s and our rules,” stated the FCA, which is liaising with Barker and Edel.
“The administrators are officers of the court and need to comply with all insolvency law. The individuals appointed are authorised to act as licensed insolvency practitioners by the Insolvency Practitioners Association.”
