The Companies included in their terms of engagement for some clients reference to an insurance policy which would provide cover for a refund of fees in certain circumstances if the clients' SDLT Schemes failed. We provide herewith information regarding these policies.
Please find attached the following documents for your reference:
It should be noted that we have been unable to source final, signed versions of either of these policies (although we continue to strive to do so). Consequently, the attached documents should only be relied on insofar as there is no alternative copy available and to our understanding, is the most recent version of each policy.
Summary of legal opinion
To assist clients, the following is a summary of the legal opinion.
The Companies are the policy-holders and should any insurance monies be received, in accordance with insolvency legislation which the administrators are bound to adhere to, they will be paid to the Companies and consequently into the general pool of funds for eventual distribution to unsecured creditors. Please note that any insurance repayments cannot be paid directly to individual clients.
There would appear to be two insurance policies, both insured by the International Insurance Company of Central America (“IICCA”), an overseas provider, not subject to regulations of any UK authority, and which is situated in Belize.
1st Policy – brokered by Equity & General Insurance Services Limited (“E&G”)
This policy had insurance cover running for a period of 9 months and 30 days from the date an individual transaction was completed.
The last product insured under the 1st policy expired on 29 April 2013, therefore any transaction that completed after 30 June 2012 is no longer covered under this policy. All cover under this policy has now expired.
2nd Policy – brokered by Orwell Insurance Services Limited (“Orwell”)
This policy indicated insurance cover for a period of 4 years from the date an individual transaction was completed.
This policy is understood to have been in place from 1 July 2012, although we are seeking further clarification on the policy from the IICCA and Orwell. The policy has an insolvency clause which the insurers may seek to rely on in the event of any claim, further to the administration of the Companies.
We are not aware of any claim having been made to date under this policy.
The joint administrators are continuing to investigate the validity or otherwise of the 2nd policy but would caution that no reliance should be placed on insurance cover in any circumstances.
Neither policy covers retrospective legislation, therefore clients who purchased schemes Crystal, 3S and Option Planning Scheme are not covered. It is understood that insurance was not in place when purchasing a Jovian scheme.