The Central Bank of Ireland has applied to have a provisional administrator appointed to CBL Insurance Europe DAC (CBLIE), a specialist in fee protection insurance, on the grounds it is in breach of a number of regulatory requirements and is in a distressed financial position, with a risk of a ‘disorderly failure’
Kieran Wallace, partner with KPMG has been appointed as provisional administrator. The move follows action by the Central Bank last week to cease writing new business with immediate effect.
The Central Bank said it has been engaging with CBLIE over a number of months seeking remediation of its regulatory issues, including the weaknesses in its financial position, but said the insurer’s inability to address these issues adequately made it necessary to apply for a provisional administrator, in order to protect CBLIE policyholders.
Existing policies continue to remain in force. However, the Central Bank is recommending that policyholders contact the firm directly, or their broker (if the policy was bought through a broker) to arrange alternative cover as soon as possible.
According to the Central bank, the manner in which the business of CBLIE is being or has been conducted has failed to make adequate provision for its debts, including contingent and prospective liabilities, while it has become unable to comply with its regulatory requirements in a material respect.
CBLIE, a wholly owned subsidiary of New Zealand’s CBL Corp Ltd, is registered in Ireland and authorised to write business in Ireland and on a freedom of services basis in Belgium, Denmark, France, Italy, Norway, Romania, Spain, Sweden and the UK. It specialises in construction related credit and financial surety insurance, professional indemnity insurance, property insurance, and travel bonding.
On 23 February the High Court of New Zealand placed CBL Insurance Ltd into interim liquidation, following an application by the Reserve Bank of New Zealand. CBL Insurance is a major reinsurer to CBLIE.
Report by Pat Sweet
