All policies of collapsed Queenstown-based Western Pacific Insurance have been cancelled after the liquidators could not do anything with the business.
The liquidators found they could not sell, transfer or reassign the business.
That move follows uncertainty around giant AMI Insurance which might need a Government bailout although chief executiveJohn Balmforth said it would take some weeks before that was determined.
David Ruscoe and Simon Thorn, of Grant Thornton, appointed Western Pacific liquidators on April 1, told policy holders that investigations had found the business was unable to provide insurance cover to its policy holders.
Western Pacific had about 7000 clients but its creditors include the Earthquake Commission, global real estate business Colliers International, New Zealand's largest medical insurer Southern Cross, AA Insurance, JB Hi-Fi of Auckland, Queenstown newspaper Mountain Scene and various car panelbeating and crash-repair businesses around New Zealand.
Since their appointment, the liquidators said they were assessing the business and reviewing and checking all policies where premiums were paid.
"Our priority is to ensure that reinsurance with offshore companies can be collected. Once we confirm this amount, we will be in a better position to progress the individual claims," they said.
To help policy holders find alternative cover, they struck a deal with Tower Insurance.
"Under this agreement Tower has agreed to consider offering cover to all New Zealand based Western Pacific policy holders at current market rates. Normal underwriting criteria will apply. We hope to report again to policy holders by May 31," the liquidators said.
