But a court ruling stymied this, prompting Equitable’s closure to new business and subsequent sale to the Halifax. This Thursday, Independent Insurance also shut its doors to new customers after an attempt to raise £150m in rescue finance from shareholders fell apart What exactly caused the problems is not yet clear. It would appear to be a combination of the rising popularity of litigation, leading to more claims, coupled with a £110m reinsurance contract the company took out in March which went sour.Reinsurance is the technique whereby insurance companies spread the risk of their policies to other funders in the wholesale market, Lloyd’s of London. It’s an arcane world, where seemingly innocuous clauses can have huge con sequences. Yet why the company’s management only recently discovered the disadvantageous terms of this contact remains unclear One thing is for sure. The surge in lawyers offering “no win, no fee” deals to people who trip up on the pavement and so on is having a heavy knock-on impact on the insurance industry.

It is leading to higher payouts to claimants, which will accordingly push up premiums for the rest of us.Independent’s board is carrying out a “thorough investigation” of how it got into this mess, and it may yet find a buyer. If it does go bust, however, the Policy Protection Board should compensate customers. This in turn would have a second knock-on effect on other insurance companies, who would have to pay a levy to the Policy Protection Board to pay for the compensation. These companies will then have to pass on these costs to customers ­ you and me.Michael Bright, who founded Independent Insurance in 1987 and floated it in 1993, resigned from the board on Tuesday and left the company without compensation.

Independent saw its share price fall from 368.5p in February, when it issued a profits warning, to just 81.5p when the shares were suspended on Monday.If you have a policy with them and want to find out more, contact your insurance broker first ­ Independent does all its business through brokers. Or you can call a special helpline set up by the company, on 0161 741 1010. Meanwhile the endowment survey confirms a depressing trend: The annual payouts or “bonuses” on endowment policies are down further this year and set to continue falling. To put it crudely, endowment funds invest in shares, as well as other assets, and stock markets have taken a pummelling in the last year or so. Even before then endowment funds were growing far more slowly than when endowment mortgages were all the rage, in the late 1980s.The table on mortgage review letters shows the diverse performances of different companies’ endowment funds. Some of you will have got “green” letters, saying there is no problem with your endowment paying off your home loan.