The committee that is not a committee – possible insurance concerns part 3
The MQ insurance committee has been mentioned at several AGMs (e.g. MQ A-G, March 2015) as well as in correspondence with leaseholders and in minutes of board meetings since 2006.
At least one director realised that there was no mechanism for regular board scrutiny or reporting of the insurance committee’s work. Furthermore, although the MQ insurance contract is over £100k and is MQ’s largest single contract there was concern that the board had never approved or reviewed any of its insurance contracts.
In the Jan 2016 board meeting amendments were proposed to MQ’s Corporate Governance (CG) document:“that membership and Terms of Reference on any committees be agreed and minuted and re-affirmed each year and their minutes appended to the minutes of board meetings.” (Board minutes Jan 2016).
There was fierce resistance to this from some directors. The board was told there had never been any committees and the ‘insurance committee’ was just an informal arrangement (see board minutes for 20/1/16). During the same meeting it was further proposed that all on-going contracts should be re-tendered every five years, this was also fiercely resisted, but accepted, though never implemented, with the proposal for tighter governance on committees being dropped.
The ‘insurance committee’ is composed of Stephen Lang, Joel Coleman, Patrick Flanagan and Matt Rittner. Of these only SL is a director and only PF has an insurance background, although he retired many years ago. It was later proposed that an MQ director working in insurance consultancy should join the committee. Although the board agreed to this they never received details of meetings. This was at the time when MQ’s insurance was being switched to AXA with its re-insurance arrangement with Artex RR4 – R&R’s wholly owned and highly profitable Guernsey captive (see the blog “Possible MQ insurance concerns: part 1 – Artex RR4 – an R&R owned insurance captive”). One would have thought that MQ would have benefited from additional expertise in this situation – or perhaps it would have led to the proposed insurance arrangements with AXA and Artex RR4 being scrutinised too thoroughly?
Should we be concerned about the governance of MQ’s insurance?