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CBL fallout hits Danish motor insurer

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CBL’s financial troubles have pushed Danish motor insurer Alpha Insurance into solvent liquidation.

The New Zealand-based global insurer, currently in interim administration by order of the High Court, is one of Alpha’s largest reinsurers.

“Effective immediately, Alpha Insurance has ceased all underwriting, including renewals,” the Danish insurer said on its website last week.

“This decision is a direct consequence of CBL Insurance… [being] placed into interim liquidation.”

Alpha is now in run-off, but says claims will be paid and all policies inforce will remain so until their contractual expiry.

The Danish insurer received a €25 million ($40 million) payment for reinsurance claims from CBL, according to the Reserve Bank of New Zealand’s affidavit asking the High Court to place the insurer in interim liquidation.

CBL made the payment last month despite instructions from the bank not to do so.

About €55 million ($87 million) of payments, including the one to Alpha, were made to various offshore recipients between February 8-20 in contravention of Reserve Bank directions, the affidavit says.

In New Zealand, building warranty provider Stamford Insurance has stepped in to cover homebuyers caught out by the CBL saga. The rescue scheme by Stamford has the support of Lloyd’s and is estimated to involve up to 10,000 homeowners.