The Reserve Bank of New Zealand has welcomed the liquidation of CBL Insurance and will be publishing a review into it next year.
It is understood that the company indulged in ongoing misreporting to the central bank, in addition to breaches of direction and a failure to meet solvency requirements, according to a news statement by the regulator.
The Reserve Bank has now commissioned an independent review, which is expected to cover from CBLI’s inception in 2013, to its collapse. It anticipates that key findings will be made public in 2019.
Reserve Bank governor and head of financial stability, Geoff Bascand said: “The Reserve Bank followed a careful and rigorous process leading up to the interim liquidation, appointing independent experts as investigators. This took time because of the need for fairness to the company, as well as the complexity of CBL Insurance’s overseas business. This was compounded by CBL Insurance’s poor quality data.
“Opposition from CBL Insurance’s directors and from the shareholder caused significant delay to the full liquidation hearing. Once major creditors of CBL Insurance failed to come forward with support for an alternative restructuring proposal, then the liquidation outcome became inevitable. We are pleased a contested trial was unnecessary.”
“CBL Insurance’s demise is a complex multi-faceted event involving many parties both in New Zealand and offshore. There will be important lessons to be considered by all parties,” Mr Bascand added.
Kare Johnston and Andrew Grenfell, partners at Mcgrathnicol have been appointed as liquidators of the troubled insurance firm, while John Trowbridge and Mary Scholtens QC will lead the independent review.
Alpha’s failure left UK policyholders in limbo. Those affected included 10,000 minicab drivers and 700 taxi drivers, of which some faced losing days’ of work as they queued to replace their policies.
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