Gefion Insurance has been declared bankrupt by the Danish Financial Supervisory Authority (DFSA).
The Danish firm operated in the UK on a freedom of services basis, which means some UK-based customers, both individual and small businesses, have held policies with the firm.
It primarily sold motor insurance products to consumers in the country via a network of Managing General Agents (MGAs).
The DFSA has withdrawn Gefion’s licence to operate, resulting in them being unable to underwrite any new policies from that date but claims arising under existing policies continued to be paid.
In a statement, the regulator said: “The Danish Financial Supervisory Authority encourages the policyholders to cancel their policy with Gefion and buy a new policy with another insurance company if possible.
“This is due to the fact that Gefion has been declared bankrupt and unless the policyholder is covered by a compensation body within its territory, it might take several years to be compensated and then probably only partially compensated in the form of a dividend from the bankruptcy estate.”
It added: “The Danish Guarantee Fund will only cover risks (within the scope of coverage) in Denmark for insurance policies written in Denmark.
“The policyholders must be aware that in the situation that the insurance contract is not covered by a compensation body within its territory it can last several years before the policyholders can get the premium refund repaid, and only in the form of dividend.”