CBL Insurance has been placed into liquidation by the High Court in Auckland.

The court last week approved a Reserve Bank of New Zealand application to have the insurance arm of CBL Corporation wound up.

CBL Insurance and its parent have been in court-imposed interim liquidation and voluntary administration respectively since February.

The Reserve Bank says public interest is best served by winding-up the business.

CBL Insurance has failed to meet solvency conditions, breached regulations and misreported its business to the bank, which is also the insurance industry regulator..

“We are pleased a contested trial was unnecessary,” the bank’s Deputy Governor and Head of Financial Stability Geoff Bascand said.

“The Reserve Bank followed a careful and rigorous process leading up to the interim liquidation, appointing independent experts as investigators. This took time because of the need for fairness to the company, as well as the complexity of CBL Insurance’s overseas business.

“This was compounded by CBL Insurance’s poor-quality data.”

The bank has commissioned an independent review of the company and expects to publish key findings next year.

The review, conducted by Australian actuary John Trowbridge and New Zealand barrister Mary Scholtens, will identify lessons for the insurance regulatory regime.

Interim liquidators Kare Johnstone and Andrew Grenfell from McGrathNicol have been appointed by the court to oversee the liquidation process.

“Policyholders should continue to notify CBL Insurance of claims, which will be assessed and processed,” the liquidators say. “However, claims cannot be paid at this time.

“Policyholders should take appropriate measures to minimise their losses if they have not already.

“An update will be provided to policyholders and creditors as soon as we are able.”