THE insurance broking business suffered another blow yesterday with the news that general broker Andrew Reynolds and Associates was to cease trading. The company is going into voluntary liquidation, owing insurance companies up to £1.4 million. A meeting of creditors will be held on November 20th.
Andrew Reynolds and Associates (ARA) held an informal meeting of creditors yesterday amid market concerns that the company was in serious financial difficulties. The meeting was held at the offices of ARA solicitors L K Shields & Partners.
Insurance companies are thought to be the only substantial creditors. The largest creditors are: Eagle Star, thought to be owed around £300,000; Lloyds, which is owed about £250,000; Guardian/PMPA, AGF/Irish Life and Norwich Union. ARA employed 30 people, most of them based at its offices in Baggot Street, Dublin.
ARA partners Mr Tony Ulhemann and Mr Seamus Kane were at the company offices yesterday, but were not available for comment.
Mr Paul Carty of the Irish Brokers Association said last night that "there appears to be no client money at risk". He said the liquidation was the result of "unfortunate trading difficulties". The broking business was highly competitive with brokerages competing actively in all areas, putting a squeeze on profits.
A spokesman for the Department of Enterprise and Employment said it had been informed the company was going into voluntary liquidation due to trading difficulties. He said it had no indication that client money was at risk, but if it was, it would be covered by the normal bonding arrangements.
However, this bond does not cover money owed to the insurance companies.
Mr Des Guilfoyle of Coopers & Lybrand is thought likely to be appointed liquidator. Market sources say it is unclear how much the liquidator will realise from selling the business to help offset its debts.
ARA is a general insurance broker offering products such as home and car insurance. It is covered by different consumer protection legislation than would apply to investment intermediaries. Clients who have paid premiums to ARA are protected under the Insurance Act.
ARA is regulated by the Irish Brokers' Association and Mr Carty said the requirements "would appear to have been fulfilled". It is understood the IBA received accounts and relevant regulatory forms covering the period up to July 1994 in October last year. The subsequent year's accounts were under request from the company, as part of the normal regulatory procedure, but had not been received.