THE FINANCIAL Regulator has secured an order from the High Court appointing a provisional administrator to an insurance company, ESG Reinsurance Ireland Ltd, and its subsidiary Accent Europe Insurance Company Ltd.
Mr Justice Peter Kelly granted the order yesterday to Declan Murphy, for the Irish Financial Services Regulatory Authority, after being told the regulator had concerns about the financial position of the companies and their abilities to meet claims.
The judge appointed Jim Luby of McStay Luby as provisional administrator to both companies.
ESG, whose parent company is based in Bermuda, and Accent were incorporated here in 1997 and 1998 respectively. Both have registered offices at Exchange Place, Dublin. ESG writes reinsurance business, writing accident, health and other business worldwide.
The regulator said the most up- to-date financial position of ESG as of September 30th last was that it had total assets of $68 million and total liabilities of $85 million, resulting in a net deficit of $18 million. The required solvency of the reinsurer was $9 million while available solvency was $25 million.
Therefore, the reinsurer was significantly in breach of its solvency requirements and might not have sufficient assets to pay its liabilities as they fell due, he said. The regulator believed the business of the company was being conducted so as to jeopardise or prejudice the rights and interests of persons arising under policies issued.
The regulator expressed similar concerns about the business of Accent, which writes primarily personal accident insurance business in several European countries. Accent had placed some 87 per cent of its reinsurance with ESG.
The regulator believed Accent had become unable to comply with the requirements of supervisory regulations and it had failed to present the regulator with a plan to restore its solvency position.
A claim of some €30.5 million had been made of Accent on November 14th last by its former agent in the Netherlands but only some €300,000 had been provided in Accent’s accounts for that claim, the court heard.
