CBL Insurance Europe goes into administration
The Central Bank of Ireland has appointed Kieran Wallace of KPMG as provisional administrator to CBL Insurance Europe (CBLIE), according to a Feb. 26 statement.
The move comes after the Irish Central Bank last week issued a direction to New Zealand’s insurer CBL to cease writing business with immediate effect through its European arm CBLIE. CBL’s parent company CBL Corporation (CCL) has experienced significant deterioration in its operating performance in fiscal year 2017.
Existing European policies continue to remain in force. However, the Central Bank is recommending that policyholders contact the firm directly, or their broker (if the policy was bought through a broker) to arrange alternative cover as soon as possible.
The Central Bank believes that CBLIE is in breach of a number of regulatory requirements and is in a distressed financial position.
"In the absence of taking this action, it is the Central Bank’s view that there could be a disorderly failure of CBLIE," it said.
"The manner in which the business of CBLIE is being or has been conducted has failed to make adequate provision for its debts, including contingent and prospective liabilities," the Central Bank of Ireland said. "The business of CBLIE is being or has been so conducted as to jeopardise or prejudice the rights and interests of persons arising under policies issued by CBLIE.
"CBLIE has become unable to comply with its regulatory requirements in a material respect. The appointment of the provisional administrator will assist in the maintenance, in the public interest, of the proper and orderly regulation and conduct of insurance business."
CBLIE, which is authorised and regulated by the Central Bank of Ireland, provides a range of non-life insurance products in Ireland and in a number of countries within the European Union on a freedom of services basis. It specialises in construction related credit and financial surety insurance, professional indemnity insurance, property insurance, and travel bonding.
The Central Bank said that it has been engaging with CBLIE over a number of months seeking remediation of its regulatory issues, including the weaknesses in its financial position. The Central Bank is of the view that the inability of CBLIE to address these issues has resulted in it being necessary to apply for a provisional administrator to be appointed to CBLIE. It added that CBLIE has been provided with the opportunity to address the issues concerned and, in the opinion of the Central Bank, they have not been adequately addressed.
On Feb. 23, the High Court of New Zealand placed CBL Insurance into interim liquidation, following an application by the Reserve Bank of New Zealand.
Join us at Intelligent Automation in Insurance - London 2018. Book by Feb 28th and you could save £300.
More of today's news
QBE Europe CEO sees growth post Brexit
Liberty Mutual profit falls by $1bn in 2017
BIBA calls for urgent action on Brexit transition right
JLT Specialty poaches EY London tax director for M&A practice
Training company to help keep re/insurance execs out of trouble
