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Financial Services: Insolvency

Question for Department for Business, Energy and Industrial Strategy

UIN 1235, tabled on 12 May 2022

To ask the Secretary of State for Business, Energy and Industrial Strategy, if he will introduce new protections for policy holders with companies in administration, to ensure that they are reimbursed the full amount of their policy is worth if that policy becomes invalidated through no fault of their own.

Answered on

17 May 2022

Consumers who hold a policy with an insolvent company are usually classed as unsecured creditors. Other unsecured creditors might include employees and trade suppliers. Changing the order of ranking for policy holders would have a detrimental effect on these other unsecured creditors as well as having wider implications for the economy, including on the cost of borrowing for firms.

The Government continually reviews the insolvency framework and will make changes where it is necessary to do so. Insurance and other related policies, however, are often protected by other methods, including regulatory regimes which provide statutory protections for consumers.

Named day
Named day questions only occur in the House of Commons. The MP tabling the question specifies the date on which they should receive an answer. MPs may not table more than five named day questions on a single day.