THE provisional liquidators of Independent Insurance have set up a company to pay outstanding claims for the collapsed insurance group, it was announced last night.

The so-called "run-off" company, Aurora Corporate Services, will pay insurance claims to policy-holders through Independent's remaining cash, investments and reinsurance contracts during the next few years.

A run-off company is set up by the liquidators to deal with forthcoming claims, and winds down after claims are paid out.

The 450 staff, mainly claims handlers, who are still employed by the group are being transferred to Aurora, which is likely to be in Cheadle near Manchester.

Daniel Schwarzmann, of PricewaterhouseCoopers, said: ''Keeping the staff at Independent motivated is very important to us.

"Aurora will employ 450 staff and their knowledge of Independent's business will ensure an efficient and effective run-off, thus providing the best result for creditors. I am very pleased to have secured the services of Ken Blanc and David McGuigan, who I believe will bring focus and energy to Aurora."

The announcement comes a day after it emerged that former chief executive of Independent, Michael Bright, had declared himself bankrupt.

Mr Bright stepped down as chief executive in April, a couple of months after Independent issued a profit warning. The group went into provisional liquidation in June after failing to raise £200m to shore up its balance sheet, leading to the loss of 1,044 jobs. It is being investigated by the Serious Fraud Office