A U.K.-backed Moscow insurer, Anglo-Russia Insurance Co., has lost its premises and operating license amid rumors that insiders may have looted the company and rivals poached its business and staff.

Anglo-Russia, in a company statement issued last month, denied it has been forced out of business and claims it has filed a court claim challenging its eviction from its Moscow premises. Although larger in the past, the company is a small one, specializing in motorist and medical coverage, with just $5 million in premiums collected in 2001. The company, now working out of the office of its lawyers, claims it has been targeted by unscrupulous competitors and some former employees.

Sources close to Anglo-Russia told IA the company was the brainchild of a group of U.K.-based companies, including Riceman Insurance Investments and Riceman Investments, which are connected to a Russian entrepreneur Alisher Usmanov and to Middlesex Holdings, a U.K.-based metal trader.

The sources told IA that Riceman Insurance Investments PLC first formed Anglo-Russia in 1995. A marketing letter issued by Anglo-Russia in 1999 declared that, in addition to Riceman, the other shareholders were four Russian companies – Interfinservice, Oskol Electro-Metallurgical Combine, MAPO-Bank and AOZT ATEK. The letter claimed that Anglo-Russia had been the first Russian insurer to place Gazprom and Oskol risks on foreign insurance markets. Gazprom is the state-owned gas monopoly and Russia's largest company ; Oskol is one of Russia's top steelmakers. Middlesex Holdings of the United Kingdom trades Oskol's steel and is linked to both Usmanov and to Riceman.

Usmanov controlled both Interfinservice and Oskol. Another Usmanov company, Gazprominvestholding, linked Usmanov to Rem Vyakhirev, the former chief executive of Gazprom.

The first chief executive of Anglo-Russia, Yury Parfyonov, previously worked with the Interfin group. Oleg Skorik took over, but soon moved on to Gazprominvestholding, leaving his wife Tatyana in charge of Anglo-Russia until she left last November, just before the collapse.

Oskol was also a policyholder of Anglo-Russia for about a year, during the period when the steelmaker was negotiating for foreign bank loans. According to company sources, Anglo-Russia provided coverage for both property and business interruption and for construction risks at Oskol; the premiums totaled $3 million, but may not have been paid up.

Another Usmanov-controlled company, Lebedinsky Ore-Processing Combine, which supplies iron-ore to Oskol, was covered by Anglo-Russia in the "property and business interruption" category. Gazprominvestholding paid Anglo-Russia for insurance to cover its office premises and fleet of cars. One of Anglo-Russia's biggest policy covers was obtained from Gazprom.

Anglo-Russia's fortunes took an initial turn for the worse in 1998, when the Russia-wide financial crisis sent the value of its assets diving. Riceman Investments then bailed the company out with a loan. In late 1999, Lebedinsky filed a $20 million damage claim, and Anglo-Russia had to go to Chancery Court in London to oblige its reinsurers to meet their obligations. Although Anglo-Russia won in the U.K. court, it then faced a Russian tax-police claim on the reinsurance payment. An internal investigation by Anglo-Russia in 2001 also discovered discrepancies in the payment of reinsurance premiums through Montenegro.

Valery Dikevich, spokesman for Usmanov, acknowledged some of the past links to Anglo-Russia, but denies any wrongdoing or any responsibility for what has happened to the insurer.

"Gazprominvestholding never had any relation to Anglo-Russia Insurance Co.," he said, "while the plants the company controlled in the past – Oskol and Lebedinsky – were shareholders of the insurance company for some time."

In December 2001, as a result of a share emission, both plants ceased to be shareholders of the company, he said, adding that he does not know who the owners of Anglo-Russia are now.

Gazprominvestholding, Dikevich added, has "no relation" to the insurer, nor to the iron-ore and steel plants. The latter are now managed by a company called Gazmetal, which is controlled by another one of Usmanov's companies.

Denis Bryzgalov, spokesman for the All-Russia Insurance Association, the industry grouping, confirmed that a letter had been received from Anglo-Russia last month in which the company lodged a complaint about its operating problems with premises.

However, he added, "no other problems were described in the letter." According to Bryzgalov, "the responsibility for monitoring the situation is with the Department of Insurance Control."

A Russian newspaper reported last week that government insurance regulators have written to the insurance association, confirming there have been numerous consumer complaints about Anglo-Russia and that the company has failed to resolve the problems on its own. The government agency has requested the insurance association to investigate.

Don't bother asking the state insurance regulator at the Finance Ministry for information on what is happening. Officials there say they won't respond by telephone or even by fax, but require letters through the the mail, which they won't promise to answer within two weeks of receipt.

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