Western Pacific keeps up premiums to reinsurers

Thursday 9th June 2011 1 Comment

The liquidators of Queenstown-based insurance company Western Pacific Insurance are hopeful that money from reinsurers will be available for claims to the company from those affected by earthquakes in Canterbury.

David Ruscoe and Simon Thorn, of Grant Thornton New Zealand Ltd, said that when they were appointed on April 1 the company had no money and reinsurance premiums were due.

The liquidators managed to borrow the money to cover the premium payments to reinsurers and are hopeful that because of that $35 million will 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," they said.

The company would not be in a position to make any repayments until all claims had been received and assessed.

About $41.2 million in claims had been received to date. Approximately $35.2 million relate to the earthquakes in September and February.

The collapses company would have a shortfall of funds.

"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," the liquidators said.

NZPA

Comments from our readers

On 13 June 2011 at 3:11 pm Claire said:

What about us claimants who are not in Christchurch? Are the liquidators seriously suggesting that we will get nothing? Are our claims less valid than those from Christchurch policy holders? We suffered a huge loss due to a cyclone - which is just as catastrophic as an earthquake. Our claim was accepted by WP, and we undertook the necessary work/repairs so that we could get back in business. The Government turned their backs on us when WP ased for a hand up, now it would seem the Liquidators are doing the same thing. Why would they even consider that we should be treated differently? Is our business not just as important as those in Christchurch? Answers are going to be needed.