Western Pacific keeps up premiums to reinsurers

Friday 10th June 2011

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

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