The Financial Services Compensation Scheme (FSCS) has declared Gibraltar-based insurance company Lamp to be in default.
The firm provided a range of insurance policies to the UK retail and commercial market, including home insurance, GAP insurance, health insurance and after-the-event insurance.
"We are still in the process of identifying how many UK customers are affected by the failure of Lamp Insurance. We are working closely with the liquidators to make sure that all eligible policyholders affected by the failure of Lamp are compensated accordingly," Jimmy Barber, chief operating officer at FSCS, said.
Lamp was forced into insolvency last week when it ran out of money and failed to bring in extra funding. It was officially liquidated on 31 May and Grant Thornton was appointed as administrator.
The company's statement read at the time: "Regrettably, negotiations have failed to secure appropriate funding and the directors of the Company concluded that they had no option other than to submit an Application to the Supreme Court of Gibraltar for the Company to be placed into liquidation".
Now4cover, which used Lamp, issued a statement to its customers saying it it still searching for insurers to provide replacement policies.
Affected individuals and businesses with a turnover of under £1m will be protected by the FSCS. They will be eligible for protection for 90% of the cost of valid claims.
The liquidation reignited the debate about the use of unrated and foreign domiciled insurers following the closure of a number of providers in Gibraltar in recent years.