CBL's European subsidiary fights Irish central bank ban on new business
By Sophie Boot
Feb. 20 (BusinessDesk) - Insurer CBL Corp says its European subsidiary's lawyers are opposing an order from the Central Bank of Ireland instructing it to stop writing new business immediately.
CBL, whose shares are suspended from the NZX as the stockmarket operator investigates concerns over its continuous disclosure obligations, said its subsidiary CBL Insurance Europe Dac (CBLIE) is continuing to otherwise operate normally and existing policies continue to remain in force. The Irish central bank has also required CBLIE to write to all appointed insurance brokers and distribution partners to inform them of the direction and to inform policyholders, it said.
"CBLIE has sought legal advice in Europe and has instructed its European legal counsel to request the CBI to withdraw this direction," the company said. "Failing this, CBLIE reserves its rights to take any action it deems necessary in order to protect its interests."
Trading in the stock was halted before the suspension, with details eked out over subsequent days that prudential regulators in New Zealand and abroad questioned the adequacy of reserves for its French construction insurance division, prompting a credit rating downgrade and prospective capital raise.
Last week, the company said it would hire advisers to sell the French construction insurance division that's seen it fall foul of regulators over solvency concerns, and is pursuing legal action against the vendors of the business. As part of that decision, it will stop writing new French construction business from April and all renewals will end from June.
CBL gave no update today on its plans for a capital raising, which will raise cash to fund a mandated increase to its reserves from the Reserve Bank of New Zealand and CBI.
The share last traded at $3.17 on the NZX before they were halted.