Western Pacific reinsurance - hope for Chch policy holders

Press release
June 9, 2011

Western Pacific reinsurance gives hope for Christchurch policy holders

Payment of reinsurance premiums by the liquidators of Western Pacific Insurance has given hope for Christchurch policy holders affected by the September 2010 and February 2011 earthquakes.

David Ruscoe and Simon Thorn, of Grant Thornton New Zealand Ltd, who were appointed liquidators of the Queenstown-based insurance company on 1 April, said in a report to policy holders that by paying the reinsurance premiums they were hopeful that approximately $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 six 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 that the premiums were due, but we managed to borrow the necessary funds to cover the payments,” they said.

The liquidators said that 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 and assessed, that is why it is important for those who are yet to make claims to do so as quickly as possible,” they said.

One thing the liquidators have identified is that there will be a shortfall in funds.

“The Canterbury earthquake has been a major factor. Of the $41.2 million in claims to date, approximately $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.”

For those with claims for losses incurred before the cancellation of their policies, the claims department is operational and can be contacted on (09) 365-1642.

“We hope to report again to policy holders by July 31, 2011,” they said.

The liquidators will be making no further comment, although a copy of the report is available on www.grantthornton.co.nz [Scoop copy: Report_to_Creditors_June.pdf]

ENDS

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