Liquidator says insurer not in position to pay claims
CBL Insurance is not in a position to pay claims from direct insurance policies, the interim liquidator said today.
Interim liquidator McGrathNicol warned holders of surety and financial risk bonds that there may not be enough funds to pay CBL Insurance claims in full.
“CBLI is not currently in a position to make any further claim payments to those policyholders with open claims made under direct insurance policies held by them.
“Policyholders should take appropriate measures to minimise any potential losses. Any costs incurred by claimants which may normally be claimable under these policies and for which the policies may be liable to respond, will rank as an unsecured creditor claim in the event CBLI is unable to pay its debts in full and is placed in liquidation.”
The news will likely increase the speed at which European and UK brokers arrange new cover.
It’s European arm, which has home insurance, solicitors’ professional indemnity, airline insolvency cover and construction cover is under close supervision from the Irish Central Bank which has applied for a provisional administrator.
The Irish Central Bank said policies remain in force, but urged policyholders to arrange new cover.
CBL Insurance fell into trouble after regulators found a $100m(NZ) reserves hole in the business.
The New Zealand insurer set up a Dublin office to trade in Ireland and passport into the UK and Europe under EU rules.
A major part of the problem is in its French arm, which underwrites construction surety and credit.