Backup insurance scheme on way
Ansvar Insurance policyholders are being asked to approve a scheme to manage their claims if the embattled insurer went under.
Ansvar, now known as ACS Ltd, withdrew from the New Zealand insurance market last year after being hit with more than $700 million in earthquake-related claims since the September 2010 quake.
It subsequently struggled to find affordable reinsurance.
ACS now has only outstanding-claims management business in New Zealand and is asking claimants to OK a contingency plan on how the company would be managed if it became insolvent.
The scheme would see administrators and a committee of creditors appointed to ensure ACS was run properly and finalise a formula for payments to claimants if a pro-rata system was needed.
ACS chief executive Andrew Moon said the company still expected to settle all outstanding claims in full, and the scheme would be triggered as a last resort.
''We are solvent and expect to remain that way. However, due to the evolving situation in Canterbury, there is a degree of uncertainty around the final cost of claims,'' he said.
''We want to have this arrangement in place as a precaution to ensure our claimants are protected in any eventuality.
''If the claims position moved to a point that the scheme was triggered, the company believes there will be better outcomes for claimants than under a disruptive insolvency process.''
ACS's British-based parent, the Ecclesiastical Insurance Office, has already committed $70m to support the business.