Reply to: Adverse consequences of MVL

[vetran]

The original paragraph in the Statement of Fact said:

[/I][/LIST]
The broker went back to the insurer and explained in full detail, and got this response:



I guess I can understand that. I know my company doesn't have any debts lurking in the shadows which might swallow up the assets, but they don't, and that's partly what the job of the liquidator is. Very annoying though.

ah that makes sense. typical insurers the devil cavorts in the detail!

[ladymuck]

Well my friend has had no issues getting landlord insurance in their personal name, with their properties not being held in a LtdCo, so perhaps you need to shop around a bit.

[Snooky]

I asked a friend who is a landlord and who MVL'd their contracting LtdCo. This restriction applies if your properties are held in a LtdCo, shouldn't apply if they're held in your name. Which backs up the point made originally that a person can't be subject to MVL.

The original paragraph in the Statement of Fact said:

no proposer..., either personally or in any business capacity has:

• in the last 5 years been declared bankrupt or been the subject of bankruptcy proceedings, an Administrative Receivership, a Company or Partnership or Individual Voluntary Arrangement, a Debt Relief Order, an Administration Order, a Compulsory Liquidation, a Creditors’ Voluntary Liquidation, a Winding Up Order or any equivalents in Scotland or Northern Ireland

The broker went back to the insurer and explained in full detail, and got this response:

Everything the client states is correct but unfortunately we have taken the stance that any liquidation proceeding would be a decline. While an MVL is accompanied by a declaration of solvency, until the process is complete an MVL can move to a CVL which could be insolvent at any point if the liquidator determines the entity cannot meet it's debt obligations.

As such we would not consider any liquidation proceedings that are ongoing

I guess I can understand that. I know my company doesn't have any debts lurking in the shadows which might swallow up the assets, but they don't, and that's partly what the job of the liquidator is. Very annoying though.

[jamesbrown]

Ah ta that makes sense its for tax reasons, the insurance bit doesn't.

I only had a few K in my company when I struck off. Took it all out first of course.

Yes, the only motivation is to take a capital distribution and then BADR for an effective tax rate of 10%. The MVL itself will cost £1-2k. It only makes sense for capital distributions in excess of £25k.

[vetran]

You'd only strike off a company with much more than £25k in net assets if you enjoyed paying a lot more tax on those assets than necessary, once they've been distributed.

Ah ta that makes sense its for tax reasons, the insurance bit doesn't.

I only had a few K in my company when I struck off. Took it all out first of course.

[jamesbrown]

Why do a MVL when you can strike off?
Both are only options if the company is solvent. No idea why it would affect insurance.

You'd only strike off a company with much more than £25k in net assets if you enjoyed paying a lot more tax on those assets than necessary, once they've been distributed.

[Zigenare]

You're responding to a 3 year old thread from a guy who has probably worked out what to do, and you think you're relevant?

Relevant with regards to you and your attempt at being billy big bollocks, yep. Imagine having the audacity to troll a "mod"...

[WTFH]

At least he got that bit correct. Your response would suggest that you're letting what you believe to be "power" go to your head. Are you hoping to intimidate him with your "status"?

You're responding to a 3 year old thread from a guy who has probably worked out what to do, and you think you're relevant?

[Zigenare]

No, my logic is you claim to understand their business plans and have decided they are completely wrong.
You're uninterested in understanding what they might be doing.
You're not prepared to take advice from others who suggest you speak to a broker or that other insurers are available, and now you're calling a mod a troll.

Good luck with your future career in politics.

At least he got that bit correct. Your response would suggest that you're letting what you believe to be "power" go to your head. Are you hoping to intimidate him with your "status"?

[MrC]

I asked a friend who is a landlord and who MVL'd their contracting LtdCo. This restriction applies if your properties are held in a LtdCo, shouldn't apply if they're held in your name. Which backs up the point made originally that a person can't be subject to MVL.

it depends on the wording. the wording for my insurer (original post) is:

Neither you, any director or partner of the business or its subsidiary companies either personally or in any business capacity:

• has been subject of an individual voluntary arrangement with creditors, voluntary liquidation, a winding up or administration order, or administrative receivership proceedings within the last 10 years;

Be interested to know the outcome here. Hopefully more insurers and brokers educate themselves and make an exception for MVLs

[vetran]

Why do a MVL when you can strike off?
Both are only options if the company is solvent. No idea why it would affect insurance.

[ladymuck]

I asked a friend who is a landlord and who MVL'd their contracting LtdCo. This restriction applies if your properties are held in a LtdCo, shouldn't apply if they're held in your name. Which backs up the point made originally that a person can't be subject to MVL.

[Snooky]

So the other day I was looking to take out an insurance policy and reading through the declarations this one caught my attention.

Neither you, any director or partner of the business or its subsidiary companies either personally or in any business capacity:

• has been subject of an individual voluntary arrangement with creditors, voluntary liquidation, a winding up or administration order, or administrative receivership proceedings within the last 10 years;

Insurer is directline. I checked with their underwriting team whether this clause would exclude directors who had carried out a solvent MVL. They said yes, so you cant get insurance with us!

I'm doubtful that there is any good business reason for them to exclude solvent MVLs.

Wondering if anyone else has had similar experiences with insurance or elsewhere of being adversely treated due to having MVL'd and if there are any workarounds (other than shopping around?)

I was also caught by this today. I started MVL a couple of months ago, and landlord insurance on my rental properties is due soon. It was all going well until I spotted a similar clause to the above in the Statement of Fact, spoke to my broker and explained the situation. They contacted the underwriter (AXA) who came back and said they could no longer insure me

Having had another longer conversation with the broker and explained in excruciating detail why this shouldn't be seen as increased risk, and pointed them to all the docs in Companies House including 14 years of solvent profitable trading plus a Declaration of Solvency, I've now asked them to go back to the underwriter and check that they really, really understand what an MVL means.

Very frustrating and not something I would've expected.

[WTFH]

No, i meant in response to the facebook group mentioned.

Absolutely, hence why i asked the question of whether anyone else who has mvl'd has experienced adversity in the original post, so i can get an understanding of whether this is just one insurer and one type of insurance or perhaps is symptomatic of more widespread issues which span consumer affairs. Yet to have anyone comment in this yet...

Perhaps you should try other insurers - as has been suggested multiple times on here.
Perhaps you should learn the difference between consumer affairs and business affairs.
Landlord insurance is not for consumers, but for businesspeople who are renting out property to consumers.

Or perhaps you are just trolling.

[MrC]

So now you're equating a 12 month old claim to "troubles with COVID"?

One insurer's policy does not mean the entire market is biased against you.

No, i meant in response to the facebook group mentioned.

Absolutely, hence why i asked the question of whether anyone else who has mvl'd has experienced adversity in the original post, so i can get an understanding of whether this is just one insurer and one type of insurance or perhaps is symptomatic of more widespread issues which span consumer affairs. Yet to have anyone comment in this yet...