Published 10 June 2011
The liquidators of Queenstown-based Western Pacific Insurance Ltd have paid the company’s reinsurance premiums, giving hope for Christchurch policyholders affected by the September 2010 & February 2011 earthquakes.
David Ruscoe & Simon Thorn (Grant Thornton NZ Ltd) were appointed liquidators of Western Pacific (Jeffrey McNally, Melbourne; & Graham Smolenski, Queenstown) on 1 April. At the end of April they cancelled all insurance policies held by the company because they were they were unable to sell, transfer or assign the business. However, the liquidators said in a report to policyholders yesterday that, by paying the reinsurance premiums, they hoped about $35 million would be available for Canterbury earthquake claims. “This entire process will take time as there are many questions still unanswered. We have applied to the courts for guidance, especially around who is entitled to potential reinsurance proceeds, which could take up to 6 months for clarification. “Being able to pay the reinsurance premiums was a major milestone, as the company has no money and we were appointed on the day the premiums were due, but we managed to borrow the necessary funds to cover the payments.” The liquidators said one of their key tacks at present was to assess the claims that had already been made: “We will not be in a position to make any repayments until all claims have been received & assessed – that is why it is important for those who are yet to make claims to do so as quickly as possible.” The liquidators said there would be a shortfall in funds: “The Canterbury earthquake has been a major factor. Of the $41.2 million in claims to date, about $35.2 million is a result of the earthquakes – $14.5 million from the September earthquake and $20.7 million from February. “We are also reviewing the performance of the directors to ascertain whether there are any actions available to us to recover funds for creditors. These actions can include claims for reckless trading, entering into transactions when insolvent and certain voidable preference payments.” The liquidators hope to report to policyholders again by 31 July.
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Attribution: Liquidators’ release, story written by Bob Dey for the Bob Dey Property Report.