Notice of failure of GBG Insurance Limited

Unfortunately, GBG Insurance Limited has failed and its directors have decided to place it into administration. The situation is complicated and not completely certain as the firm enters administration. Whether or not a policyholder is affected by GBG’s insolvency will depend on whether or not the policyholder is directly insured by GBG. The Commission is encouraging policyholders to review their policy documentation to determine the insurer as the policy documentation will state who the named insurance company is who underwrites the insurance policy.  

If you have questions as to whether your policy is affected, and if so how, please consult the Frequently Asked Questions document which has been published by the joint administrators of GBG, Alex Adam, Andrew Wood and Michael Tagg of Teneo, and which is available at www.gbg.com Policyholders who are directly insured by GBG are encouraged to contact their insurance agent or broker and to consider seeking alternative replacement insurance cover.

By way of background, the current directors of GBG approached the Commission in March 2023 to make the Commission aware that, despite the audited accounts showing the firm to be in good health, they had discovered that assets shown in the accounts representing many millions of pounds did not actually exist. Since that point the Commission has engaged intensively with the directors as they tried to recapitalise the business and/or secure a sale of the firm, in the interests of the policyholders. At several points over the last few months there was a very strong prospect that transactions may have been executed that would have protected all policyholders. Sadly, the final proposed buyer, which had given us and the directors of GBG the strongest signals that it would buy the business as a going concern, decided to withdraw from the deal in mid-December rather than inject the large amounts of fresh capital required. This last minute withdrawal from the transaction after some months of due diligence and integration planning forced the directors of GBG to seek administration, other reasonable avenues having been exhausted.

The Commission will be conducting an investigation focused on how the large hole in the firm’s balance sheet developed and on why it was not identified more quickly by various parties whom the Commission would expect to have validated the accounting records and other relevant information. This is likely to be a complex and lengthy investigation and we cannot, as we commence the investigation, predict its outcome. We will examine the evidence and endeavour to understand what went wrong. Whilst we must clearly investigate thoroughly, we would not wish the fact of our investigation to lead anyone to draw any adverse conclusions about the current directors of GBG. At present, we have no evidence to suggest they are not competent people with integrity.

The Commission is liaising closely with the joint administrators and a further announcement will be made at the appropriate time.

UPDATE 28/12/2023: An Update specifically for TieCare International policyholders of GBG Insurance Limited — GFSC has today been published.