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The ongoing crisis at the U.K.’s Independent Insurance Group deepened yesterday with the announcement that a proposed rights issue, designed to build up the insurer’s diminished capital reserves, failed to materialize. Today the company announced that it was “temporarily” closing its books to new business and renewals.

Independent said it was abandoning further efforts to raise an estimated £200 million ($278 million). Unless a buyer can be found, the next step would be to go into runoff. Britain’s Financial Services Authority is monitoring the situation, but so far has declined to open an investigation of Independent’s problems.

Potential investors are clearly worried about the ongoing negative cash flow, and questions concerning Independent’s reinsurance arrangements, amid growing concern that they be insufficiently funded to meet anticipated claims, which have risen sharply. Its search for possible buyers has so far come up empty.

The company’s shares have already been suspended from trading on the London Stock Exchange (See previous article), and yesterday A.M. Best downgraded its ratings from ‘A-‘ to B++, citing “reduced financial flexibility, weaker operating performance, deterioration of reserves and uncertainly over management strategy and future leadership” as the reasons.