Our statement dated 13 June 2019 referred to Elite’s proposed solvent Scheme of Arrangement (SoA) and Elite’s letter of 4 June 2019 explaining the proposed SoA that was sent to all known or potential creditors, brokers, coverholders and agents of Elite.
Since then Elite continued to work on the design of the SoA and the legal documentation and data to support it. As part of the preparation for the SoA, Elite obtained an updated independent actuarial reserve review and conducted an updated assessment of the company’s assets and liabilities. The deterioration in reserves experienced in a number of business lines as well as issues with the collections of some of its assets base, has rendered Elite balance sheet insolvent.
As a result, Elite will not be proceeding with the SoA and the company was placed into Administration on 11 December 2019, with Edgar Lavarello and Dan Schwarzmann of PwC appointed as Joint Administrators (the Administrators).
Pursuant to the Gibraltar Insolvency Act 2011 (the Act), the Administration of Elite has the effect of passing management and control of the company to independent insolvency practitioners. The Administrators must perform their functions with the objective of:
(a) rescuing the company as a going concern;
(b) achieving a better result for the company’s creditors as a whole than would be likely if the company were wound up (without first being in Administration); or
(c) realising the company’s assets to pay a dividend to secured or preferential creditors.
The making of an Administration Order imposes a moratorium and restricts the rights of creditors in a number of ways, for example, the right to start or continue legal proceedings.
In general, the process for agreeing claims should continue in the same manner as prior to the appointment of Administrators. As such, would policyholders, brokers, intermediaries, agents and coverholders please continue to send correspondence on individual claims or other matters to the offices of Elite at the address listed below.
The Administrators will work to collect the assets of Elite with the objective of making distributions to insurance creditors, including policyholders. It is possible that the amount recovered will not be sufficient to meet the amount due to policyholders in full for outstanding claims. The Administrators are in the process of establishing policyholders’ protections under the relevant compensation schemes.
The GFSC will work closely with the Administrators to identify and communicate directly and fairly with all policyholders.
Policyholders should contact their broker, solicitor, or other intermediary in the first instance through their usual contacts.
Further queries and correspondence
The Administrators will use the website, pwc.co.uk/elite-insurance, as a means of delivering urgent updates to creditors and will continue to use this as a key basis of communication. If you have any further queries please contact one of the below:
UK & Other Eliteemail@example.com
UK & Other +44(0)207 129 8147
France +44(0)207 129 8661
Italy +44(0)207 129 8663
Address: Elite Insurance Company Limited (in Administration),
c/o Armour Risk Management,
20 Old Broad Street,
Correspondence or queries for the Administrators should be sent to: firstname.lastname@example.org
What is the position of existing policyholders?
Insurance policies issued by Elite have not been cancelled or terminated and are technically still valid. However, claims arising under a policy will not be paid at this time. The Administrator, will collect the assets of Elite which would be distributed to insurance creditors. It is not possible to estimate when such distribution might be made or its amount. Any distribution may not be for the full value of the insurance claim.
What should policyholders do?
In the present circumstances, the policyholder should consult their broker, solicitor or other intermediary and it may be considered prudent to take out alternative cover with another insurer.
What happens to the premium paid to Elite if new insurance cover is purchased?
The terms and conditions under your existing policy remain applicable and you should read your policy documentation in relation to cancellations. If you are entitled to a refund of premium upon cancellation this would be a claim against Elite which should be notified in accordance with the policy terms. This claim will, however, not be paid by Elite at this time and may only be paid at a future date from assets available to meet insurance creditors. It is recommended policyholders consult their broker, solicitor or other intermediary for advice.
What happens if I have a current claim?
Claims should be reported in accordance with the instructions on the policy documents. The Administrator may admit claims as insurance creditors in the administration or submit claims to a compensation scheme, if such a scheme is available for eligible policyholders.
UK Policyholders Only
If eligible under the rules of the scheme, the FSCS may protect UK policyholders in respect of claims made under policies written by Elite but unpaid along with claims for return of premium. The Administrator will be cooperating with the FSCS to facilitate the processing of claims for affected UK policyholders.
The Administrator will contact regulators and compensation schemes of the other countries in which Elite policies were written. It may well be that schemes for the compensation of policyholders are not available in all jurisdictions. Policyholders should seek advice from their broker.