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

 

RBNZ sought interim liquidation after CBL breached orders

RBNZ sought interim liquidation after CBL Insurance breached orders, paid $55M offshore

By Sophie Boot

March 1 (BusinessDesk) - The Reserve Bank of New Zealand says it asked for CBL Insurance (CBLI) to be put into an interim liquidation after the company paid $55 million to overseas companies, breaching the central bank's orders.

Parent company CBL Corp, an Auckland-based credit surety and financial insurance risk firm, had its stock suspended from the NZX on Feb. 8 amid concerns from NZX Regulation about the information it had given the market, following engagement between it, CBL, the Financial Markets Authority (FMA), the Reserve Bank, and a number of overseas regulators with prudential oversight of CBL’s international insurance business. On Feb. 20, CBL Insurance told the Reserve Bank it was continuing to operate despite being below the minimum regulatory solvency level.

Interim liquidators were appointed by the Auckland High Court last week, and today the Reserve Bank's deputy governor and head of financial stability Geoff Bascand said the payments had been the cause. The central bank's concerns about CBL Insurance's reserving policies and regulatory solvency were being reviewed with the company and through an independent investigation, and the bank had told CBL it needed approval to make any significant transactions.

"CBL Insurance did not have our approval but nevertheless paid a total of $55 million to two other entities," Bascand said. "The payments may provide some creditors of CBL Insurance with an advantage over other creditors."

In an affidavit released alongside Bascand's statement, the bank's head of prudential supervision Tony Fiennes said the bank believes CBLI has $750 million in assets, mainly in cash and insurance receivables, and there is serious risk the directors could further dispose of those or that overseas creditors could ask for freezing orders.

CBLI paid 25 million euro, or around $42 million, to Alpha Insurance of Denmark for reinsurance claims on Feb. 16, despite the bank declining permission and ordering it not to make the payment, the affidavit says. Between Feb. 8 and Feb. 20, it also made other payments, with the total including the Alpha Insurance payment worth $55 million. Fiennes said the company's chair, John Wells, had acknowledged the breach for the Alpha Insurance payment, but had offered no explanation for the other payments.

CBL Corp appointed voluntary administrators this week in an effort to preserve value for stakeholders, while the Central Bank of Ireland sought a provisional administration of CBL Insurance Europe dac to avoid a "disorderly failure".

(BusinessDesk)

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Land Report: Issues With Soil Degradation

An environmental report released today has found we are damaging and losing our soils and our native plants and animals. More>>

ALSO:

Water Quality Report: Cause For Optimism

National River Water Quality Trends released by Land, Air, Water Aotearoa (LAWA) this week, reveal that for all river water quality parameters monitored over a 10 year period, more sites were improving than deteriorating. More>>

ALSO:

IMF Report On NZ: Positive Economic Outlook

Minister of Finance Grant Robertson has welcomed the IMF’s Concluding Statement, released following its annual visit, which provides an independent assessment of the strength of the New Zealand economy. More>>

ALSO:

Retail Power Price: Review Panel Named

The Energy and Resources Minister Megan Woods has released the details of who will sit on an expert advisory panel which is tasked with leading a review into the price of electricity in New Zealand. More>>

ALSO:


Increasingly Disruptive Threats: Govt Cyber Security Refresh

Broadcasting, Communications and Digital Media Minister Clare Curran today announced a comprehensive refresh of New Zealand’s approach to cyber security. More>>

ALSO:


Regional Growth: Action Plan To Modernise Taranaki’s Economy

The Provincial Growth Fund (PGF) will invest up to $20 million to help future-proof the Taranaki region by diversifying its economy, creating additional jobs and leveraging off the strong base the region has established through its oil, gas and agricultural ... More>>

ALSO:

Winding Down Irrigation: Funding Ends For Crown Irrigation Investment

The Government has begun winding down public funding for large-scale irrigation through Crown Irrigation Investments Limited (CIIL), in line with the Coalition Agreement and the Confidence & Supply Agreement. More>>

ALSO: