CBL - guidance updated

15/03/2018

Kieran Wallace of KPMG was appointed as administrator to CBL Insurance Europe DAC (CBLIE) on 12 March 2018 by the High Court on application by the Central Bank of Ireland, in accordance with the provisions of the Insurance (No. 2) Act 1983.

Mr Wallace had previously been appointed as administrator on a provisional basis on 26 February 2018. The administrator is scheduled to report to the High Court on the state of the company on 30 April 2018.

Information for policyholders

It is the statement of the Central Bank that existing policies remain in force.

It is the view of the Law Society that appointment of an administrator does not constitute an insolvency or non-performance event as defined in the professional indemnity insurance regulations as the purpose of the appointment is to take over management of the business of the insurer and to carry on the business as a going concern with a view to placing it on a sound commercial and financial footing.

Consequently, it would be precipitous to claim that this latest adverse development is an insolvency or non-performance event for the purposes of the professional indemnity insurance regulation. As such, provided that there are no further adverse developments, solicitors covered by CBLIE are not required at this time to obtain alternative cover. However, it is open to firms to seek alternative cover if they so wish.

Should an insolvency or non-performance event as defined under the professional indemnity insurance regulations be triggered in future, each firm covered by the insurer will be required to obtain replacement cover within 30 working days from another participating insurer or the Assigned Risks Pool (ARP) from the date of the insolvency or non-performance event to the end of the current indemnity period (30 November 2018). This will require the payment of an additional premium to the new insurer or the ARP.

Updated guidance notes

Helpline

The Society will continue to monitor this matter closely. Any queries should be directed to the Society’s PII helpline at 01 879 8707 or piihelpline@lawsociety.ie.

The helpline is available Monday to Friday 10am to 4pm to assist with queries.