Church-based insurer ACS (NZ) Ltd, the former Ansvar NZ, will ask policyholders to approve a scheme to manage their claims if the struggling insurer goes under.

Ansvar CEO Andrew Moon told insuranceNEWS.com.au the company is developing a contingency plan, although it is doing everything it can to pay claims.

“We have taken every step, as long as uncertainties still exist – contingency planning in a proper and prudent way,” he said.

Mr Moon says the scheme will be approved under the New Zealand Companies Act and not under the country’s Insolvency Act.

“This is a proper piece of contingency planning – not a reaction to a solvency question.”

Ansvar NZ had to pull out of earthquake cover in New Zealand at the end of last year following the heavy toll on many of its church customers from the Christchurch earthquakes.

UK-based parent company Ecclesiastical has estimated the total cost from the earthquakes will be $623 million, which will be covered by reinsurance.