RBNZ gets High Court order putting CBL Insurance into interim liquidation
By Paul McBeth
Feb. 23 (BusinessDesk) - The High Court has ordered CBL Insurance be placed into interim liquidation on an application by the Reserve Bank as the insurer's prudential supervisor.
In the High Court in Auckland today, Justice Patricia Courtney ordered the appointment of McGrathNicol's Kare Johnstone and Andrew Grenfell as interim liquidators of CBL Insurance. The application was made without notice and determined today, the judgment said.
Justice Courtenay ruled "there be no publication of information submitted to the court in relation to this application," although the facts and terms of the order and names of the interim liquidators were allowed to be published.
In a statement, the Reserve Bank said the court ordered the appointment of the interim liquidators and issued confidentiality orders relating to the matter.
"Policyholders should address queries about their own position to the liquidators," the central bank said.
The order enables the interim liquidators are empowered to "maintain the assets of the defendant company", including the ability to take custody and control of assets, seek freezing orders, and take control of all global assets irrespective of which country they're located in.
CBL Insurance is a subsidiary of NZX-listed credit surety and financial insurance risk firm CBL Corp. The Reserve Bank has been reviewing the New Zealand insurer to assess the adequacy of its reserving for a French construction business, and set the CBL unit's minimum solvency at 170 percent and required it to consult on any non-business as usual transactions of more than $5 million.
Those issues have also attracted attention from the Central Bank of Ireland, where CBL Insurance Europe DAC is domiciled, with the Irish regulator instructing the insurer to stop writing new business immediately.
Earlier this month CBL Corp said it was hiring advisers to sell the French construction insurance division and had triggered legal rights against the vendors who sold the Kiwi company the unit.
CBL's stock has been suspended from trading on the NZX as the stock market operator tries to work out whether it's kept the market informed of material information and met continuous disclosure obligations, which has also attracted engagement from the Financial Markets Authority. The shares last traded at $3.17 before being suspended, more than twice the $1.55 price the shares were sold at in an initial public offering in late 2015.