Ansvar scheme may be ‘attempt to scare policyholders’

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9 July 2012

A lawyer who acts for a number of Ansvar claimants in New Zealand says the insurer’s scheme of arrangement “seems like an attempt to scare policyholders into taking less money”.

The New Zealand High Court recently approved the scheme of arrangement, which was devised by ACS (NZ) Ltd – previously known as Ansvar New Zealand – for handling and settling claims arising from the Christchurch earthquakes.

The insurance regulator, the Reserve Bank of New Zealand, expressed concern that the insurer may not be able to meet stringent new solvency requirements that came into force on July 1.

Michael Childress, a director at insurance consultancy Risk Worldwide in Christchurch and a lawyer who represents some of the scheme’s claimants, is openly critical of the scheme of arrangement.

He told insuranceNEWS.com.au he has urged claimants to “fully re-evaluate their claim and not rely on the insurance company to do so”.

ACS says all claims will be paid and the scheme of arrangement was implemented to protect the interests and positions of policyholders.

“It’s hard to understand that,” Mr Childress said. “If they have sufficient resources and are solvent there should be no reason for a scheme.

“There should have been more than enough reinsurance to pay for the losses anyway.

“It seems like an attempt to scare policyholders into taking less money.”

A spokesman for Ansvar CEO Andrew Moon told insuranceNEWS.com.au that ACS “is continuing to provide a quality claims service and is settling claims as quickly as possible”.

“It is solvent, we fully expect it to remain solvent and we are confident of paying all claims in full.”