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‘Don’t let this become another BICAL’
by Sandro Mangion
The freezing of the funds held in Malta by Independent Insurance
of the UK following the company’s collapse is tarnishing
the credibility of the company’s local agents, Micallef
Insurance.
Micallef Insurance Agency Ltd managing director Richard A. Micallef
told The Malta Business Weekly yesterday that some of Independent
policyholders believe that it is up to his company to issue
the payment of refunds and claims. In effect, this responsibility
lies upon Independent Insurance itself.
“We don’t want this to become another BICAL, with
people still waiting for their money in heaven,’ said Mr
Micallef. He pointed out that although the Law only obliges
insurance companies to keep 40 per cent of their turnover in
Malta, Micallef Insurance maintained, on behalf of Independent,
three times as much. Hence, he believes there is no valid reason
for creditors to be left waiting for long before they are paid
their due.
The reason why Micallef Insurance maintained so many funds here,
Mr Micallef explained, was the lesson it learnt from another
bitter experience it went through. In 1990 the National Employers’
Mutual, of which the company was the local agent, went into
liquidation. In that situation, Micallef Insurance managed to
secure a
portfolio transfer to Middle Sea Insurance and was authorised
by the Ministry of Finance to carry out a smooth run-off of
NEM accounts. In October 1990 Micallef obtained the authority
to act for Independent in Malta, and managed to transfer former
NEM policyholders to the new insurance over a 12-month period.
Micallef Insurance is working hard to make sure that life goes
on. Since 18 June the company has become an agent of Citadel
Insurance plc, and is hence inviting those who had a policy
with Independent to shift to Citadel. Many were doing so, Mr
Micallef reported. However, others were leaving Micallef Insurance
in search of other companies. Mr Micallef pointed out, however,
that the company has managed to retain much of its core business
at its head office in Valletta.
In an important Press notice issued on Tuesday, the Malta Financial
Services Centre strongly recommended that policyholders of Independent
should arrange alternative insurance cover immediately. The
notice also announced that PricewaterhouseCoopers of London,
which have been appointed by the High Court of Justice in London
as provisional liquidators of Independent, are shortly expected
to start issuing notices of cancellation of policies. The notice
re-iterated that, as has been advised in previous notices, no
payments can be effec-ted at this stage.
Payments will only be done after all liabilities which Independent
have in Malta are determined. The MFSC confirmed that funds
which are maintained in Malta by Independent will eventually
be released by the Centre. The funds will be utilised towards
the payment of liabilities, including return of premiums due.
The MFSC said that pro rata payments will be made should these
funds be insufficient to meet all payments due to policyholders
and claimants.
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