The Leasehold Knowledge Partnership has published the results of an in- depth investigation, in liaison with concerned leaseholders at Rendall and Rittner managed developments, which exposes how Rendall & Rittner, which is owned by R&R Residential Management Limited is making large profits from an off-shore ‘captive company’.
R&R Residential Management Limited says on its website “… we pride ourselves on the fact that we do not receive insurance commissions” but the R&R group also owns a captive insurance company based in Guernsey, Artex Insurance (RR4) IC Limited, that has returned an approximate 40% profit every year since it was set up in 2015.
Artex makes clear that its business is based on an alternative to commissions by underwriting some of the risk.
Leaseholders argue that there is no risk involved in this re-insurance business with AXA, which according to the accounts routinely over-pays for re-insurance with Artex.
The use of captives is well established in the insurance market, but they are owned by the insured who pays the premium, so they are handling their own money. The concern here is the use of captive insurance companies owned by agents/intermediaries, which inevitably gives rise to apprehension of a conflict of interest.