By BBC News Online's Orla Ryan
Independent Insurance seemed to come from nowhere to bag itself a place in the UK galaxy of insurers.
Its founder Michael Bright always styled himself as a maverick of the insurance industry and walked away with a handful of industry awards in recent years for his efforts.
Now the company - which specialises in the business of providing insurance to companies - has closed for new business and faces "unquantifiable losses", according to a report in the Financial Times.
The report suggests that claims were not entered into the company's accounting systems.
This news has jeopardised a rescue package for the company, raising questionmarks over the future of the niche insurer that vowed to shake up the staid UK market.
Bright lights
Michael Bright founded Independent Insurance in 1986, having worked in the insurance business since he was a teenager.
His new business appeared to go from strength to strength as it snapped up insurance businesses in the UK and Europe.
It built itself a lead role in the niche market for commercial insurance.
Investing heavily in underwriting, it closely examined the risks presented by each company, with its aim being to cut the size and number of claims.
It won plaudits as the first insurer to be floated on the Stock Exchange since the second world war and for a time was a media and City darling, with its stock price peaking earlier this year.
Michael Bright personified the company, wining and dining brokers and staff, styling himself as a maverick in the industry.
"There are very few strong characters in the insurance industry. Mr Bright was certainly one and he was known as Mr Independent Insurance," Paddy Jourlay, deputy editor at Insurance Times, said.
One city analyst said: "He had differentiated himself, had managed to grow his business quite substantially, he did bring a fresh approach to the way they were doing business."
One of the company's strengths was their loyal network of brokers, something that other insurance companies have since sought to copy.
"He had a core of small and medium brokers around the country who supported him and he provided preferential service for them," the city analyst said.
Independent injury
But the company was battered by a huge growth in personal injury claims as the UK compensation culture encouraged more and more people to sue employers.
To grow its business, it needed more money and it had hoped to gain this through a rights issue. But Friday's newspaper revelations now make this increasingly unlikely.
In recent years, Independent Insurance has been dogged by rumours of a lack of reserves - basically it had not set aside enough money to cope with claims.
It has what is known as a long tail - it takes several years for claims to materialise on policies taken out several years previously.
It had taken out some reinsurance policies to cope but earlier this week it was investigating claims about "additional arrangements" designed to shore up the insurer's finances.
Independent Insurance had seen its business grow dramatically in the last year and speculation now exists that some of this business could now be riskier than it first appeared.
"With the benefit of hindsight, they may have wanted to grow their business, beucase they were afraid of claims catching up with them," the city analyst said.
It is now unclear what the next stage for Independent Insurance will be.
One option is that a buyer emerges for the company's renewal rights and the infrastructure.
The existing company could go into run-off, that means taking no new business while continuing to pay the claims for a number of years, before eventually being wound up.