Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

CBL Insurance Limited interim liquidation

1 March 2018

CBL Insurance Limited interim liquidation


The High Court appointed interim liquidators to CBL Insurance Limited on Friday last week and issued an order prohibiting publication of information about the matter. The High Court lifted the prohibition today, enabling the Reserve Bank to state the reasons for its actions.

Deputy Governor and Head of Financial Stability, Geoff Bascand, says the Reserve Bank asked the High Court to appoint interim liquidators to CBL Insurance after the company made payments of $55 million in breach of directions by the regulator. The payments to overseas companies were made in the context of significant doubts about CBL Insurance’s solvency.

He says the Reserve Bank’s concerns about CBL Insurance’s reserving policies and regulatory solvency were being reviewed with CBL Insurance and through an independent investigation commissioned by the Reserve Bank. CBL Insurance had recently confirmed to the Reserve Bank that it was continuing to operate despite being below the minimum regulatory solvency level.

“In this context, the Reserve Bank had issued a direction that CBL Insurance must consult with us and have our approval for significant transactions. CBL Insurance did not have our approval but nevertheless paid a total of $55 million to two other entities. The payments may provide some creditors of CBL Insurance with an advantage over other creditors,” Mr Bascand said.

The affidavit released today explains the Reserve Bank’s reasoning. Some information in the affidavit has been redacted due to the need for ongoing confidentiality around some commercial matters.

Further information: Reserve Bank affidavit to the High Court re CBL Insurance (PDF 8.4MB)

Creditor / policyholder enquiries: cblinsurance@mcgrathnicol.co.nz

Background:
CBL Insurance provides insurance and reinsurance internationally and in New Zealand. Most of its business is overseas, with about one percent of premiums originating from its New Zealand insurance business. In New Zealand, CBL Insurance provides:
• Underwriting for “Homefirst” builders guarantee;
• Contractor bonds, which cover financial losses if a contractor defaults on contractual obligations;
• “Deposit Power” branded property deposit bonds, which provide security to reduce the deposit needed when financing or refinancing mortgage loans;
• Rental guarantee bonds, which insure against loss of rental income; and
• Travel and cargo agent bonds, offered through IATA (International Air Transport Association), which protect airlines against collapse of agents.

ends

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Up $1.20: $17.70 Minimum Wage Next Year

Coalition Government signals how it will move toward its goal of a $20 p/h minimum wage by 2021... “Today we are announcing that the minimum wage will increase to $17.70 an hour on 1 April 2019." More>>

ALSO:

Reserve Bank: Capital Proposals Are 'Radical', Says Fitch

International credit rating agency Fitch says the Reserve Bank's proposals for increased bank capital adequacy ratios are "radical" and "highly conservative relative to international peers", but the result will ultimately be "significantly stronger buffers" against financial system shocks. More>>

ALSO:

Regions And Skills: Work Visa Proposals 'Step In The Right Direction'

Immigration Minister Iain Lees-Galloway announced yesterday that the Government is consulting on proposed changes to employer-assisted temporary work visa settings to ensure that work visas issued reflect genuine regional skill shortages. More>>

ALSO:

Long Commutes: Hamilton To Auckland Passenger Rail Trial Gets Green Light

The NZ Transport Agency Board has approved a business case for the next steps in a start-up trial Hamilton to Auckland passenger rail service, Transport Minister Phil Twyford announced. More>>

ALSO:

Working Group Update: Mycoplasma Bovis Eradication Making Substantial Progress

International experts are impressed by New Zealand’s efforts to eradicate the cattle disease Mycoplasma bovis and are more confident the campaign is working... More>>

ALSO: