Insurance company ERIC declared in default

The Financial Services Compensation Scheme (FSCS) has declared the insurance provider European Risk Insurance Company (ERIC) to be in default and is now accepting eligible claims against them.

ERIC was declared in default on 28 April and the FSCS has confirmed that claims may be made by firms and clients within the FSCS eligibility rules.

The SRA had been made aware of new problems involving ERIC and Balva Insurance Company AAS and has been speaking to both companies and the Financial Conduct Authority (FCA).

The SRA says ERIC was a qualifying insurer in the 2011/12 indemnity period and wrote solicitors professional indemnity business under a fronting arrangement with Balva, however difficulties experienced by Balva had a knock on effect on ERIC.

The Icelandic Financial Supervisory Authority gave notice that it had withdrawn ERIC’s operating licence with effect from 12 February 2014 and it had appointed a three person Resolution Board to review the business with a view to managing the portfolio towards a sale.

In the absence of a sale the company is likely to be put into liquidation and indications are that this is likely to be a relatively short process.

Currently ERIC is still accepting claim notifications but is not in a position to pay defence costs or settle claims.

The Authority has provided contact details for new claims with ERIC, which can be found at the bottom of the page.

The liquidator appointed to wind up Balva is gathering all the creditors’ claims and a report will be made to the Latvian Financial and Capital Market Commission so decisions can be taken about the solvency of the company.

The SRA is waiting for the solvency positions of both insurers to be clarified in the coming weeks.

To apply for new claims with ERIC, contact: Ms Emma Grimsdottir or Ms Kristin Helgadottir at:

European Risk Insurance Company

hf Síðumúli 28

108 Reykjavík

Iceland

Phone: 00354 518 5300 Email: [email protected]

View an outline of the FSCS claim eligibility rules here: European Economic Area (EEA) Qualifying Insurers (PDF 2 pages, 41KB)

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