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Christchurch Earthquake 2011

Backup insurance scheme on way

Last updated 15:51 18/04/2012



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.

- The Press

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Bob   #2   03:52 pm Apr 19 2012

Working for an insurance company it never fails to anger me reading the comments of arm chair experts. Dirk speaks of contractual commitment but as with many people has an expectation that exceeds that contract.

When their incorrect assumption is pointed out they claim they have been mislead or we are just trying to weasel out of paying. Insurance companies like most companies have to compete in a highly competitive market and so if their product is not competitve then it won't sell.

Everyone gets their lawyer to check all over the purchase of the house, but the contract to replace it if is destroyed is purchased online. How many people have actaully read their policy and if they didn't understand something asked their insurer? And if you can't understand it seek independent advice. Take some reponsibility.

Given Dirk's mis-trust of private insurers I hope to prove a point he has now cancelled all his policies.

Dirk   #1   09:12 am Apr 19 2012

Just when will the government admit that private insurer's have done a poor job of actually providing cover? AIG/State and many others continue to find ways to stall and to pay less than is fair.

Policy holders paid their premiums and received a contractual commitment. Now the lawyers come in with weasel words to bail their clients out.

Insurers are 'too big to fail' as we are seeing with the slow response to the dire needs of so many in Christchurch. It is time to nationalize the insurance industry for the good of all. O' that's right; this government remains obsessed with the illusory benefits of privatization.

There are no easy answers. But the current mess makes clear that some current approaches are not working.

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