The provisional liquidators of Independent Insurance have set up a company to pay outstanding claims for the collapsed insurance group.

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

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

Earlier this month, the British Policyholders Protection Board (PPB) made a decision to treat some 9,000 Irish motor policyholders as UK policyholders.

The Irish group were customers of Carole Nash Insurance Intermediaries whose policies were underwritten by Independent Insurance.

Another 700 Irish corporate clients of Independent Insurance with employers liability and public liability insurance are not covered by the PPB and their claims will not be paid.

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

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 collapsed into provisional liquidation in June after failing to raise around #200 million to shore up its balance sheet, leading to the loss of 1,044 jobs.

It is currently being investigated by the Serious Fraud Office in Britain.