Corporate advisers are being warned they could face an influx of queries from multinational clients after the collapse of the international PMI provider Global Benefits Group.
The group, which covers health, life, disability and travel insurance is based in Guernsey. It fell into administration after uncovering a shortfall in capital. As reported in Health & Protection, attempts to sell the business failed at the end of last year.
The company has a client base that includes multinational companies, international schools and non-profit organisations as well as expatriates and high-net worth individuals.
GBG directors notified the Guernsey Financial Services Commission last March about problems in their accounts, and it is understood that assets representing “many millions of pounds” did not exist. GBG said the problems related to historical financial issues which resulted in a shortfall in its current capital requirements.
The Guernsey Financial Services Commission will now be conducting an investigation into the accounting irregularities, which is expected to be a “complex and lengthy” procedure.
Advisers are being warned they may not receive commission for selling GBG products. Advisers are also being told that the company has informed policyholders to seek advice from their broker or agent, so can expect to get an influx of queries from companies and organisations in the coming days.
The Commission said it will investigate why these historical financial issues had not come to light earlier. It said that it did not want the fact it is investigating the firm to lead anyone “to draw any adverse conclusions about the current directors of GBG.”
It added: “At present, we have no evidence to suggest they are not competent people with integrity.”
It added that whether or not a policyholder is affected by GBG’s insolvency will depend on whether or not the policyholder is directly insured by GBG.
