Three people have been charged as a result of a fraud investigation at the Tribune insurance company.
The firm went into liquidation in November
The company, based at Dalkeith, went into liquidation in December, leaving 40,000 customers, mainly household policyholders, without cover.
Two men and a woman were arrested by police officers from the Specialist Fraud Squad.
Lothian and Borders Police said they have been formally charged and a report has been sent to the procurator fiscal.
Watchdog the Financial Services Authority (FSA) applied at the Court of Session to have the company placed into provisional liquidation at the end of last year.
It was reported that the company had been selling policies but failed to have them underwritten.
About 90 members of staff were thought to have been affected by the company's liquidation.
In a brief statement on Friday, a police spokesman said: "Three people have been arrested and charged as result of extensive enquiries carried out by Lothian and Borders Police Specialist Fraud Unit into the activities of the insurance brokers Tribune Risk and Insurance Services, of Hardengreen Business Park, Dalkeith."