HM Treasury has published a consultation paper entitled Strengthening the administration regime for insurers.
In the consultation paper the Government sets out proposals to improve the protection and payment of benefits for holders of insurance contracts with an insurer facing financial difficulties, in particular addressing gaps in protection that remain in the administration regime for insurers in comparison to the liquidation regime. The proposals include:
- Applying the existing rules for valuing contracts of insurance in liquidation to administration.
- Revising the objectives of an administrator of an insurance company by: (i) changing the law to require administrators to provide assistance to the Financial Services Compensation Scheme to enable it to administer the compensation scheme and secure continuity of contracts of insurance; and (ii) applying existing powers relating to continuity of contracts of long-term insurance on the liquidation of an insurer to administration.
The deadline for comments on the consultation paper is 25 June 2010.
Strengthening the administration regime for insurers: a consultation, 25 March 2010