The Australian Securities and Investments Commission (ASIC) has been informed of a flawed lineslip facility that left Australian policyholders potentially exposed.

As exclusively reported by our Daily News service, a London-based JLT Re broker was sacked after the problem came to light.

While ASIC will say only that it “does not comment on complaints received”, insuranceNEWS.com.au understands the Australian regulator is aware of the issue, which is said to affect “a significant book of business” managed by Perth-based Core Underwriting.

The company, acting as a wholesale broker, placed business for several clients in the Lloyd’s market via a lineslip facility with the London-based JLT Re broker.

Lineslips supplied by brokers to underwriters at Lloyd’s describe the risks to be insured.

Core Underwriting is an authorised representative of Empire Insurance Services. It was set up in 2013 and specialises in general liability, professional indemnity, contractors’ plant and equipment and contract works.

InsuranceNEWS.com.au understands that Lloyd’s syndicates declined to cover the Core Underwriting lineslip when it came up for renewal this year, but this information was not passed on by the London broker. Therefore, premium was received but there was no Lloyd’s policy in place.

JLT Re has acted at Lloyd’s on behalf of at least one major Australian broking group, and a delegation of senior Australian executives left for London late last week to try to resolve the issue.

However, insuranceNEWS.com.au understands this process has been complicated by JLT Re’s merger with Guy Carpenter, following the completion of Marsh’s acquisition of JLT.

Negotiations between the parties have focused on ensuring cover is in place for all affected policyholders, and that all valid claims are paid.

A JLT Re spokesman in London confirmed to insuranceNEWS.com.au that action has been taken against the broker concerned.

“Recently, we identified some issues related to a single lineslip facility handled by a former employee of JLT Re,” he said. “The facility was arranged by a local insurance broker to insure certain Australian policyholders.

“We immediately conducted a review of all potentially impacted risks and worked with the insurers to put in place a remediation plan to ensure all affected policyholders are properly covered and all valid claims are paid.

“We have terminated the employee’s employment and promptly notified the relevant authorities in both the UK and Australia.”

Core Underwriting declined to comment because the issue could be subject to legal action.