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

Two weeks ago Ansvar policyholders in New Zealand voted in favour of a contingency scheme for settling claims should the company’s financial position deteriorate. The scheme required the court’s approval.

The scheme is now active, despite reservations expressed by the insurance regulator, the Reserve Bank of New Zealand.

The bank is concerned the scheme is “based on an inadequate injection of capital” and has flagged the possibility that ACS will not be able to meet solvency requirements that come into effect in New Zealand from the end of this month under the Insurance (Prudential Supervision) Act 2010.

Several other policyholders, including the church property trustees of the Anglican diocese of Christchurch and the Roman Catholic bishop of Christchurch, filed formal notices of opposition.

However, after what were described as “further assurances from the applicant” and some minor amendments, those claimants have accepted the court’s decision.

Justice Geoffrey Venning noted the regulator’s concerns but said the scheme provides the “best opportunity for an ordered and efficient run-off and management of claims with minimal disruption in relation to the company’s processes, as opposed to the situation of a liquidation”.

He also cited the availability of a further $NZ22 million ($17.3 million) by UK-based parent company Ecclesiastical Insurance as a “significant factor” in his approval of the scheme.