A London-based JLT Re broker has been sacked after a lineslip facility insuring Australian policyholders was exposed as a sham.
The incident is said to impact “a significant book of business”, and has led to crisis talks and a hastily arranged trip to London by a delegation of senior Australian insurance executives.
Sources associated with the matter have confirmed details to insuranceNEWS.com.au, but as the issue could yet be subject to legal action those directly affected in Australia have declined to comment.
insuranceNEWS.com.au understands that Perth-based Core Underwriting, acting as a wholesale broker, placed business for several clients in the Lloyd’s market via a lineslip facility with the London-based JLT Re broker.
Lineslips are documents that describe the risks to be insured, and are supplied by brokers to relevant underwriters at Lloyd’s.
Core Underwriting is an authorised representative of Empire Insurance Services. It was set up in 2013 and specialises in general liability, professional indemnity, contractors’ plant and equipment and contract works.
It is alleged that Lloyd’s syndicates declined to cover the Core Underwriting lineslip when it came up for renewal this year, but this information was not passed on by the London broker. Therefore, premium was received but there was no Lloyd’s policy in place.
insuranceNEWS.com.au understands that efforts to resolve the issue have been complicated by JLT Re’s merger with Guy Carpenter, following the completion of Marsh’s acquisition of JLT.
Negotiations between the parties have focused on ensuring cover is in place for all affected policyholders, and that all valid claims are paid.
A JLT Re spokesman in London confirmed to insuranceNEWS.com.au that action has been taken against the broker concerned.
“Recently, we identified some issues related to a single lineslip facility handled by a former employee of JLT Re,” he said. “The facility was arranged by a local insurance broker to insure certain Australian policyholders.
“We immediately conducted a review of all potentially impacted risks and worked with the insurers to put in place a remediation plan to ensure all affected policyholders are properly covered and all valid claims are paid.
“We have terminated the employee’s employment and promptly notified the relevant authorities in both the UK and Australia.”