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Four insurers licensed with conditions on Canterbury earthquake claims

Wednesday 13th November 2013

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Four of the 99 insurers licensed under the Reserve Bank's new prudential supervision regime have specific conditions related to solvency and capital risk stemming from their exposure to the Canterbury earthquake.

The central bank has required some insurers to have specific conditions on their licence, such as increased solvency margins, and has decided not to name the firms, according to the six-monthly financial stability report.

Among those, four firms have specific conditions "relating to capital or solvency requirements due to risks associated with their Canterbury earthquake claims," the report said.

Insurers have paid out $16.3 billion in claims on the Canterbury quakes as at Sept. 30, with $5.3 billion coming from the Earthquake Commission and the remainder from private insurers, the report said.

"Private insurers have paid a higher proportion of their estimated ultimate claim costs than EQC," the RBNZ said. "There remains considerable uncertainty on the ultimate claims cost with some significant issues still to be resolved through the courts and/or by negotiation."

The central bank is working with insurers to develop regular statistical updates for insurers, and will consult with them next year on any proposals.

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