Dominion Underwriting has ended its arrangement with Philippines-based UFI South Sea Surety, saying it will no longer act as the unauthorised foreign insurer’s binder or in any other capacity.

Last month South Sea Surety advised Dominion it was going to replace its reinsurer, the Philippines Government Services Insurance System (GSIS), with a panel of new reinsurers.

But investigations by Dominion revealed that GSIS had never acted as South Sea’s reinsurer.

In an update issued to its Australian brokers last week, Dominion said GSIS “was not, at any stage, on risk as South Sea Surety’s reinsurer in respect of any of the current Australian contracts of insurance which we have arranged on its behalf”.

“It remains the position that Dominion has no present reason to suppose that South Sea Surety is, in any way, unwilling or unable to meet its liabilities in full under all contracts of insurance and that an onshore claims fund is still in place.”

Sunrise Exchange News understands that about $3 million of all premiums received on behalf of South Sea Surety have been retained in Australia in a trust account operated by Proclaim Management Services.