By David Bull, James Thaler, Michael Jones

May 8 - (The Insurer) - Lloyd's is looking into allegations by several carriers and brokers that UK-based HISL Brokers incorrectly claimed to have trading relationships with them when marketing a newly launched insurance facility.

Uncertainty over which companies have provided backing for the facility, a mechanism used to place and syndicate risk in the Lloyd’s subscription market, has led to U.S. wholesalers seeking alternative lines of insurance on behalf of their retail broker clients for property risks that had already been placed with the facility, two market sources told The Insurer.

"We are aware of the allegations and are looking into the situation. Anyone who is concerned about the validity of their policy should discuss immediately with their broker," a spokesperson for Lloyd's, which self-regulates the eponymous insurance market in London, told The Insurer.

HISL Chairman Richard Tee and Harry Hail, the intermediary’s head of business development who has been marketing the facility to brokers, declined to comment on the allegations or any action by Lloyd’s, which has not launched a formal investigation.

The Insurer could not independently confirm how much capacity from carriers the HISL facility has in place, or if any insureds or brokers have been negatively impacted because of HISL’s actions.

There could also be implications for the insured and its broker if replacement capacity is more costly and has more restrictive terms, industry sources said.

A marketing presentation seen by The Insurer projected $1 billion of premiums would flow through the facility, which has been marketed by HISL as an AI-enabled platform capable of matching risk to carrier appetite, this year. The initial focus was on property and terrorism, with other insurance lines to be added later in 2025.

The presentation – which details the “exclusive online quote to bind platform” the facility operates on – claimed HISL had support from insurers and reinsurers, as well as from several U.S. wholesale brokers. Quote to bind is the process from an insured getting a quote from a broker which, if agreed to, creates a binding insurance contract.

Other emailed communications from Hail reviewed by The Insurer claimed some wholesalers had made large premium commitments.

Three sources with knowledge of the situation told The Insurer that concerns about the HISL facility were first raised late last month by Jeff McNatt, Amwins Brokerage Co-President, after several high-value property accounts were quoted and bound at rates far below their expiring premiums.

McNatt contacted other major U.S. wholesalers named in marketing materials, who denied any affiliation with the HISL facility, the sources added.

“As an industry, we have a responsibility to communicate openly when suspicious activity emerges,” McNatt said when asked for comment.

At least 10 deals, including for risks in Florida and California, had been placed with the HISL facility through U.S. wholesaler USG Insurance Services. The company’s brokerage division national director Mitchel Zelman has been leading placement into the facility, broker sources with knowledge of the situation told The Insurer.

Two sources with knowledge of the situation said a number of those deals are now being unwound, with other wholesale brokers drafted in by retail brokers to replace the HISL facility on the property insurance placements.

USG declined to comment. Zelman did not respond to a request for comment.

CAPACITY CLAIMS

The presentation seen by The Insurer showed HISL claimed to have fronting capacity – where an insurance company provides its rated paper for policies to be written on – from AIG and other carriers, supported by a panel of 24 reinsurers.

A source with knowledge of the situation said AIG had not engaged with HISL.

The presentation also included the logo of insurer Convex, which sources familiar with the company said is not supporting the facility and had not authorized the use of its branding.

Separately, Munich Re's Great Lakes Insurance UK is named as the "contract lead" on what appear to be two non-binding quotation documents for Florida risks.

A source familiar with the company said that Munich Re had learned this was an "error" and the name should not have been included.

WHOLESALER DENIALS

U.S. wholesale brokers Brown & Riding and RT Specialty, which the HISL presentation seen by The Insurer claims to have signed up, denied involvement.

Brown & Riding CEO Jeff Rodriguez told The Insurer that the company met with HISL representatives last year but decided not to participate.

“Any such statements, marketing materials or any other representations indicating our involvement are not accurate,” he said.

“We have not committed to placing any business with HISL, nor do we intend to do so in the future,” he added.

A spokesperson for RT Specialty said it “has not placed even a single dollar or pound of premium with HISL and we have zero commitment or intention to do so.”

Southwest Risk and QuoteWell were also named in the HISL presentation.

A Southwest Risk spokesperson said the company “has never executed an agreement with HISL or placed business into the facility".

QuoteWell’s chief business officer Tom Brighton said: “QuoteWell has never traded with HISL or Mr Hail. Following exploratory conversations there appeared to be limited substance behind their offerings and operations. As a result, we ended the dialogue.”

Wholesale brokers CRC Group and Brown & Brown's Bridge Specialty were named as supporting the facility with premium commitments in communications seen by The Insurer. Both also denied signing up to the facility.

A spokesperson for CRC Group said the company “has no business relationship with HISL and has made no premium commitments of any kind.” The spokesperson said CRC has sent a cease-and-desist letter to HISL “in response to the unauthorized use of our name.”

A Bridge Specialty spokesman said some of its brokers “have had conversations” with HISL in recent months, but “we have not placed anything with them.”

Additionally, sources said that HISL had told them carriers including Allianz, HDI and Fidelis were involved with the facility.

A spokesperson for Allianz said it is not participating. HDI said that although it does have a trading relationship with HISL it could not comment on “any position regarding this facility".

Sources familiar with Fidelis said the company does not have a relationship with the HISL facility.

Munich Re, Berkshire Hathaway and RenaissanceRe are among the reinsurers claimed by Hail to be on the panel, according to the emailed communications seen by The Insurer.

RenRe declined to comment, and Berkshire Hathaway did not immediately respond to a request for comment. Sources close to Munich Re said it is not on the panel.