Deputy Governor and Head of Financial Stability, Geoff Bascand, says the Reserve Bank asked the High Court to appoint interim liquidators to CBL Insurance after the company made payments of $55 million in breach of directions by the regulator. The payments to overseas companies were made in the context of significant doubts about CBL Insurance’s solvency.He says the Reserve Bank’s concerns about CBL Insurance’s reserving policies and regulatory solvency were being reviewed with CBL Insurance and through an independent investigation commissioned by the Reserve Bank. CBL Insurance had recently confirmed to the Reserve Bank that it was continuing to operate despite being below the minimum regulatory solvency level.“In this context, the Reserve Bank had issued a direction that CBL Insurance must consult with us and have our approval for significant transactions. CBL Insurance did not have our approval but nevertheless paid a total of $55 million to two other entities. The payments may provide some creditors of CBL Insurance with an advantage over other creditors,” Mr Bascand said.The affidavit released today explains the Reserve Bank’s reasoning. Some information in the affidavit has been redacted due to the need for ongoing confidentiality around some commercial matters.Further information: Reserve Bank affidavit to the High Court re CBL Insurance (PDF 8.4MB)Creditor / policyholder enquiries: This email address is being protected from spambots. You need JavaScript enabled to view it.

| A RBNZ release  ||  March 01, 2018   |||