Possible insurance concerns: part 2 – avoiding questions
The published minutes for the MQ A-G AGM of 22 November 2017 state that a motion was passed, “to restrict correspondence on insurance matters to those we are obliged to provide under legislation”. The reason given for this was to avoid unnecessary work.
At the time neither the board nor the meeting were aware that since September 2015 MQ’s insurance has been placed with AXA with a part of the risk being re-insured with Artex Insurance (RR4) IC Limited (Artex RR4) – a Guernsey based insurance company which is wholly owned by R&R Residential Management Limited (R&R RML). Neither was the meeting told that Artex RR4’s gross and net profits have fairly consistently hovered around 40% of turnover since it was set up in June 2015. Furthermore, a careful examination of the relevant accounts for R&R RML indicates that the liability of Artex RR4 appears to be capped at a level below the reinsurance premium from AXA. This would eliminate any risk of loss. See “MQ insurance concerns: part 1 – Artex RR4, an R&R owned insurance captive” for more details.
At the January 2020 AGM Matt Rittner was asked if the risk Artex is exposed to is capped – he acknowledged it was but was not prepared to state the level of the cap. Moreover, the published minutes fail to record this answer but instead say “This is irrelevant at this juncture.”
It seems likely that on discovering this arrangement members would have questions. When a leaseholder raised questions, including about the board’s approval of this arrangement and its competitiveness the MQ A-G chairman replied “Your question falls outside of the majority motion passed at the 22 November 2017 AGM.”
Notice of the motion presented to the November 2017 AGM to restrict correspondence on insurance matters was not circulated in advance as per S301 of the 2006 Companies Act and so was not “validly passed”.
Should we be concerned about this?