Alpha Insurance A/S has been bankrupted on 8 May 2018.
We issued policies which were underwritten by Alpha Insurance A/S (Alpha) of Denmark. Alpha entered into bankruptcy on the 8th May 2018 and the policies were terminated on the 11th August 2018. This means that anyone holding one of these policies is currently uninsured. This will present a problem to any homeowner either needing to make a claim on the policy or alternatively wishing to sell or re-mortgage the property.
We have been working for many months together with BCR Legal Group, the FCA and the FSCS as well as with a number of insurers to facilitate a transfer of UK Alpha latent defects insurance policies to a new insurer with the funds being paid over to the incoming insurer by the FSCS on behalf of FSCS eligible policyholders, i.e. the homeowners.
If the transfer proceeds cover will be backdated until 11th August 2018, the date the liquidators of Alpha terminated all Alpha policies. Currently the Danish Guarantee Fund (DGF) is meeting all claims on policies reported on or before 11th August 2018. If the transfer takes place then the incoming insurer will deal with all claims on policies from 11th August 2018.
The FSCS have indicated that if the transfer cannot take place by the 2nd July 2019 they will not fund a transfer but will instead fund the repayment of premiums to eligible policyholders notwithstanding that the original premiums were paid by developers for the subsequent policyholders (homeowners) benefit. We recognise that this will cause distress for many homeowners.
Many will find great difficulty in obtaining replacement insurance or not have the information insurers require to effect any replacement. Moreover even where it is obtained the cost of the replacement insurance will be substantially more than the compensation payment being offered by the FSCS.
We and the FSCS recognise that the option of paying premium refund compensation will be a very unsatisfactory outcome to policyholders however the FSCS inform us that they can pay only 90% of paid premiums for the remaining term rather than the cost of replacement insurance and they are unable under their rules to pay claims on policies notified since the Alpha policies were terminated on 11th August 2018.
24 June 2019