Liquidators appointed to CBL Insurance

New Zealand’s High Court has placed insurance firm CBL Insurance Ltd, the main subsidiary of CBL Corporation Ltd, in interim liquidation after a request from the country’s central bank.

The High Court has appointed Kare Johnstone and Andrew Grenfell, partners of McGrathNicol, as interim liquidators and has also issued confidentiality orders relating to the matter.

Policyholders have been directed to address queries about their own position to the interim liquidators.

The Reserve Bank licenses and prudentially supervises CBL Insurance Limited in New Zealand.

The CBL group’s French construction insurance business, which has made big losses and called into question whether it has sufficient reserves to cover the losses.

The Reserve Bank regulates the insurance sector and ordered the company to increase its reserves. CBL has been looking to raise as much as $100 million to cover losses and accounting discrepancies in the French business.

It had warned that it would make a full year loss of between $75m and $85m. The Central Bank of Ireland had also ordered CBL’s Dublin-based European business to stop writing new business.

AM Best, a global credit rating agency for the insurance industry, has dropped the group’s rating and slashed that of the insurance subsidiary to junk status.

Meanwhile, the company’s shares have been in a trading halt since early February, and the Stock Exchange and Financial Markets Authority are inquiring into how the company has kept investors informed of developments.