The High Court has ordered CBL Insurance be placed into interim liquidation on an application by the Reserve Bank as the insurer's prudential supervisor.
In the High Court in Auckland today, Justice Patricia Courtney ordered the appointment of McGrathNicol's Kare Johnstone and Andrew Grenfell as interim liquidators of CBL Insurance. The application was made without notice and determined today, the judgment said.
Justice Courtenay ruled "there be no publication of information submitted to the court in relation to this application," although the facts and terms of the order and names of the interim liquidators were allowed to be published.
In a statement, the Reserve Bank said the court ordered the appointment of the interim liquidators and issued confidentiality orders relating to the matter.
Policyholders should address queries about their own position to the interim liquidators (firstname.lastname@example.org).
The order enables the interim liquidators to "maintain the assets of the defendant company", including the ability to take custody and control of assets, seek freezing orders, and take control of all global assets irrespective of which country they're located in.
CBL Insurance is a subsidiary of NZX-listed CBL Corporation.
The company said the interim liquidator had been appointed pending the outcome of an application to the Court for the appointment of a liquidator to CBL Insurance. It was not an appointment with respect to CBL Corporation nor any of the other group companies.
The company's website describes CBL Insurance as "New Zealand's largest and oldest credit surety and financial risk provider, supervised and regulated by the Reserve Bank of New Zealand".
"The business is focused on financial risk products, builders risks, sureties, guarantees and contractor bonds worldwide - in particular in Europe and Scandinavia," it says.
The business operates in 25 countries in five regions.
CBL Corporation managing director Peter Harris was last year named EY Entrepreneur of the Year.
CBL Corp's chief operating officer Suzanne Tindal left the company this month, while the company's stock was suspended from the NZX over continuous disclosure concerns.
The company announced Tindal would start the role on February 1 in November. This month it said that "due to events taking place that are already known to the market, Suzanne and CBL have agreed to end their employment relationship".
NZX suspended the CBL Corporation stock this month due to concerns the market operator's regulation team has about whether the company has given complete and true material information to the market.
Trading in the stock was halted before the suspension, with details eked out over subsequent days that prudential regulators in New Zealand and abroad questioned the adequacy of reserves for its French construction insurance division, prompting a credit rating downgrade and prospective capital raise.
The insurer has said it was hiring advisers to sell the French construction insurance division that's seen it fall foul of regulators over solvency concerns and is pursuing legal action against the vendors of Securities and Financial Solutions Europe SA (SFS). It had said it would need a couple of weeks to finalise a capital raising and last week said that process was continuing.
The company this month said it still expected to report annual earnings on February 27, having issued a profit warning that it posted a loss of between $75 million and $85m in calendar 2017.
CBL Corp on Tuesday said its European subsidiary's lawyers were opposing an order from the Central Bank of Ireland instructing it to stop writing new business immediately.
CBL said its subsidiary CBL Insurance Europe Dac (CBLIE) was continuing to otherwise operate normally and existing policies continue to remain in force.
The Irish central bank has also required CBLIE to write to all appointed insurance brokers and distribution partners to inform them of the direction and to inform policyholders, it said.
"CBLIE has sought legal advice in Europe and has instructed its European legal counsel to request the CBI to withdraw this direction," the company said.
"Failing this, CBLIE reserves its rights to take any action it deems necessary in order to protect its interests."
- NZ Herald, BusinessDesk