The unrated Danish motor supplier says it “strongly disagrees” with the order and provides it has continued its capital elevating efforts because it seeks to adjust to its solvency capital requirement.
The Danish Monetary Companies Authority (DFSA) has ordered Gefion Insurance coverage to cease writing new enterprise.
The transfer comes after the regulator determined to not approve Gefion’s restoration plan and the order will stay in pressure till the DFSA can approve a brand new plan or Gefion complies with its solvency capital requirement.
Insurance coverage Age reported earlier this 12 months that Gefion had been ordered to not broaden its scope of enterprise.
In response, Gefion acknowledged that it “doesn’t agree with the DFSA’s evaluation” that its restoration plan doesn’t present enough proof that it is going to be in a position to fulfil its solvency capital requirement inside the six month restoration interval.
It stated in a press release: “Gefion Insurance coverage has continued its capital elevating efforts for the reason that submission of the restoration plan in January with a view to revive the enterprise to a degree that may enable us to proceed writing enterprise within the brief time period.
“We’re at the moment in on-going and progressed discussions with potential capital suppliers so as to safe enough personal funds to fulfill the corporate’s solvency capital requirement and re-establish the solvency ratio to above 100 earlier than the expiry of the restoration interval.”
Gefion lately reported that its solvency ratio for 2018 had fallen from 72% to 49% after it printed corrected info for its 2018 annual report.
The unrated motor insurer acknowledged that it additionally “strongly disagrees with the order to stop writing new enterprise” and famous that it has appealed the choice to the Danish Enterprise Appeals Board.
Gefion continued: “The Danish Enterprise Appeals Board has already suspended a earlier order from the DFSA, and we hope to acquire an identical consequence on this matter. Within the meantime, nonetheless, we’re required to adjust to the order.
“It will be important for us to underline that the order doesn’t affect enterprise that has already been written on behalf of Gefion Insurance coverage and operations will proceed as ordinary in relation to such enterprise.”
Gefion additional criticised the order for not being a “proportional measure which is appropriate to guard the pursuits of our policyholders”.
It added: “The enterprise of Gefion Insurance coverage has already been restricted following latest choices from the DFSA and there was no deterioration within the firm’s monetary place, which might justify the order.
“In actual fact, the corporate expects an enchancment within the underlying enterprise within the coming interval on account of the termination of loss-making brokers and different components.
“The corporate nonetheless complies with its minimal capital requirement and has to date complied with all different orders which were issued by the DFSA.”
The Danish regulator has additionally informed the supplier to write down off sure receivables from three of its brokers.
It detailed that for one of many brokers, Gefion can keep away from write offs if it could possibly show that the agent isn’t in monetary difficulties.
In line with Gefion, the enterprise has already absolutely written down the prevailing receivables in the direction of two of the three brokers talked about by the regulator. It defined that it didn’t count on any additional adversarial developments consequently.
Gefion continued: “The agent receivables had been written down as quickly because the Firm was made conscious of the adversarial monetary developments for these two brokers.
“Almost about the third agent, the Firm is genuinely shocked that the DFSA has taken the view that receivables ought to be written down as there aren’t any indications of the agent being in a financially distressed scenario and the agent continues to adjust to the related solvency necessities of the house regulator.
“In our opinion, the matter has not been absolutely investigated by the DFSA and we count on that the DFSA will change this a part of the choice as quickly as extra info is supplied.”
Final December, the DFSA printed a liquidity order by which it acknowledged that Gefion wanted to have liquid belongings of no less than €5m (£four.2m) by the top of the month.
Insurance coverage Age revealed in January that the enterprise had complied with the order following additional funding from its shareholders.
Gefion lately issued a response to the information that Staveley Head had gone into administration, stating that it didn’t prematurely terminate its contract with the enterprise.
Steven Muncaster and Sarah Bell, each of Duff & Phelps, had been appointed as joint directors for Staveley Head on 5 February 2020.
In a press release, the worldwide advisor stated the transfer is a results of solvency points on the dealer’s primary insurer, which led to “an early and sudden termination of the contractual association which was in place”.
In February this 12 months, Bollington confirmed it had suspended buying and selling with Gefion till additional discover. Final December, UK-based motor MGA Pukka stopped writing new enterprise with the Danish supplier.
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