A criminal investigation has been launched at Jersey Mutual after a suspected fraud spanning years was uncovered.
The insurance society, which revealed a deficit of nearly £900,000 in its latest accounts, suspects that some amounts due to reinsurers over the years were “inappropriately withheld."
Police Financial Crime Unit officials are now investigating, while the Jersey Financial Services Commission has also been informed as regulator.
President Sam Le Breton wrote to customers on Wednesday to advise them of the “suspected financial impropriety”.
Pictured: Jersey Mutual is based in Halkett Place.
“Dear Member, We regret to advise you that we have recently become aware of potential fraudulent activity involving our finances that has occurred over a number of years. As a consequence we are currently undertaking detailed investigations as to the significance and impact of this activity,” his letter read.
Mr Le Breton moved to reassure clients that their insurance policies are still in place, while Jersey Mutual had “not been compromised and… remains in a strong, safe position”.
He further advised that the Jersey Mutual was not financially vulnerable following the alleged fraud.
Reinsuring partners were also said to be supporting the firm, which was described as having “significant reserves backed by a portfolio of liquid investments”.
“Our lawyers have put in place all appropriate measures to aid in the recovery of the monies involved in order to mitigate any losses, where possible,” Mr Le Breton noted.
While he said that further information could not be given “in light of the ongoing criminal investigation”, the company’s latest financial statement provides further details of the “irregular activity”.
“While the full impact of such activity has yet to be determined, it appears that some amounts due to reinsurers over a number of years may have been inappropriately withheld. As a result, a provision has been included in these financial statements for the year ended 30 September 2018 amounting to £343,645 as due to reinsurers in this respect,” it explained.
The statement, which also showed a total comprehensive deficit of £876,523 compared with an income of £361,016 last year, also contained a note from the company’s auditor, who said they were unable to properly carry out their work due to the investigation.
According to the document, Jersey Mutual’s Board is ultimately responsible for safeguarding the society’s assets and “taking reasonable steps for the prevention and detection of fraud and other irregularities".
The news is unfortunately timed for the firm, which has been based at Halkett Place since the 70s and is well-known for its quirky televised ads.
Next year, it is set to celebrate its 150th year of operation. Established in 1869, Jersey Mutual is Jersey’s oldest – and only – insurance society.
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