Risk Worldwide in the Press NZ "Insurer Settles Some Larger Claims"
Insurer Settles Some Larger Claims
Insurer of churches and historic buildings Ansvar has settled some of its larger commercial claims since a policyholders’ meeting on June 12 as the Reserve Bank predicted would happen.
The Reserve Bank raised concerns several weeks ago that claimants who settled with Ansvar early would be best served and that those with complex claims or smaller claimants would be disadvantaged.
In June, policyholders approved a scheme of arrangement for managing claim payments if Ansvar became insolvent.
The Reserve Bank raised issues over Ansvar’s future solvency and the potential to disadvantage creditors with complex claims further back in the queue, leaving them at lower risk of a lower, or no settlement. Ansvar withdrew from the New Zealand insurance market late last year after millions of dollars of Canterbury quake claims, and changed its name to ACS (NZ) Ltd, short for Ansvar Claims Services.
ACS repeated this week that based on projected financial information, it was able to meet the regulatory solvency standard and had given that advice to the Reserve Bank.
The Central Bank has confirmed it has received information from ACS and was considering what, if any, action to take next.
The bank would not comment on the news that ACS had settled some larger commercial claims since the meeting and whether that reinforced its concerns that creditors with more complex claims, taking longer to settle, could be disadvantaged.
ACS said it was continuing to settle claims and believed it would be able to pay all claims in full.
“Since the ACS creditors’ meeting on June 12, significant progress has been made and ACS has settled a number of larger commercial claims,” the company said.
The settlements would “release a great deal of pressure on ACS’s financial situation and strengthen its solvency position”.
ACS did not respond to a request for clarification.
Michael Childress, an insurance recovery consultant at Risk Worldwide, who acts for some Ansvar claimants, has said the contingency scheme put pressure on policyholders to settle early and he urged claimants to submit their claims as soon as possible so they could receive the maximum possible, in case the insurer went under.
ACS would not say which claims had been settled and several of the larger organizations told The Press they had not settled all claims.
Methodist Trust Association executive officer Greg Wright said the association had not settled its claim with ACS but it had received interim settlements.
Catholic Diocese of Christchurch financial administrator, Paddy Beban said the diocese was still negotiating but hoped its claim would be finalized in the next few months.
The Church Property Trustees, which have 150 claims, had not yet settled and claims were at various stages of progress, because of the number of buildings involved.
Cholmondeley Children’s Home general manager Shane Murdoch said the school had not yet settled and was still in discussions with the insurer.
St Andrew’s College general manager David Evans said the school had received progress payments and interactions with the company were progressing positively.