CBL liquidation suggested by administrator
The administrator of New Zealand-based CBLC, the ultimate parent of CBL group of Companies (CBL group), has recommended the liquidation of the re/insurance company.
The CBL group operates globally in the business of re/insurance services as a credit surety and financial risk insurer, with a focus on offshore construction and property industries.
The High Court of New Zealand has placed CBL Insurance into interim liquidation on Feb. 23, 2018 following an application by the Reserve Bank of New Zealand. KordaMentha was appointed as the administrator of CBLC, while CBL Insurance in New Zealand and CBL insurance Europe in Ireland were put under the control of separate insolvency officials.
CBLC is unable to meet its obligations to creditors, KordaMentha said in a report. It has no direct trading assets and two of its largest operating business units are subject to separate insolvency processes where we were not able to agree a coordinated sales process and into which we do not currently have visibility, the report said.
While sale processes have commenced for some of the other business units and they are likely to be sold, liquidity proceeds received by CBLC will be used to repay creditors, the administrator said. No restructuring proposal has been put forward at this time that creditors could vote upon at the meeting as an alternative to liquidation. The administrators therefore consider it would be in the interests of creditors for the company to be placed in liquidation, the report says.
CBLI provided quota share reinsurance to Alpha Insurance A/S of Denmark and Elite Insurance of Gibraltar.
Alpha Insurance also failed and declared bankruptcy on May 8. As a result, thousands of London taxi and minicab drivers received a text message telling them their insurance had been cancelled. Up to 700 taxi drivers and 10,000 minicab drivers are affected, the Licensed Taxi Drivers Association reportedly said.
Elite Insurance Company (EIC) has been acquired by a group of investors led by Bermuda-based Armour Group.
EIC previously distributed its products through third party intermediaries located in UK and Europe on Feb. 1, 2018. Elite had already announced on July 5, 2017, that it had ceased writing new business. As of March 31, 2017, the gross reserves associated with the run-off business of Elite were in excess of £250 million.
Armour specializes in the creation and implementation of solutions and acquisitions within the run-off and other specialty sectors of the global insurance and reinsurance marketplace.
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