CBL Corporation, which has been ordered into interim liquidation by the New Zealand High Court, has appointed KordaMentha as voluntary administrators.

KordaMentha New Zealand partners Brendon Gibson and Neale Jackson will work with CBL management to oversee the voluntary administration process, which includes executing strategies to preserve the insurer’s various operating units.

The voluntary administration applies only to its New Zealand-domiciled companies. Other businesses owned by CBL, including Sydney-based Assetinsure, are not affected, KordaMentha says.

Assetinsure CEO Gregor Pfitzer told insuranceNEWS.com.au the business “continues to operate normally”.

He says AssetInsure has exposure to one New Zealand-domiciled company through reinsurance, “and [we] will look to make alternative reinsurance arrangements where appropriate”.

“Assetinsure is independently authorised and regulated by the Australian Prudential Regulation Authority in Australia,” he said. “Its capital requirements are separate to those of CBL Group companies, and Assetinsure has only limited exposure to one New Zealand-domiciled company through some reinsurance.”

Assetinsure contacted brokers to reassure them that no policies would be affected by the liquidation, and that Assetinsure would continue to write insurance in its own right.

CBL was placed into interim liquidation following a court application by the regulator, the Reserve Bank of New Zealand, which has been reviewing CBL’s business, particularly the reserving for its French construction business

The Auckland-based insurer is bracing for an after-tax consolidated loss of $NZ75-85 million ($70-79 million) when its financial results for last year are released tomorrow.

KordaMentha said in a statement today that voluntary administration will allow the group to continue trading “through a formal process at the parent-company level, to determine the best way forward for all stakeholders”.

McGrathNicol partners Kare Johnstone and Andrew Grenfell have been appointed interim liquidators by the court.

“Control of the business and assets of [CBL Insurance] is now with the interim liquidators,” McGrathNicol said.

AM Best has removed CBL Insurance from “under review with negative implications” and has changed its financial strength rating to a non-rating designation of E (under regulatory supervision) from B++ previously, and its long-term issuer credit rating to “e” from bbb+.

CBL Corporation has also been removed from “under review with negative implications” and had its long-term issuer credit rating of bb+ withdrawn by the ratings agency.

The group’s financial woes can be traced to the collapse of Gibraltar-based Elite Insurance, which wrote most of CBL’s European business until last year, and funding concerns for its French operations.

Earlier this month CBL announced plans to ditch French company Securities and Financial Solutions Europe just over a year after sealing its acquisition for €94.5 million ($147.9 million).

The insurer announced last week that the Central Bank of Ireland had ordered its Dublin-based subsidiary CBL Insurance Europe to stop writing new business in the EU market until further notice. CBL has said it will make a “legal request” to have the ban overturned.

The European business specialises in construction-related credit and financial surety insurance, professional indemnity cover, property insurance and travel bonding. Managing general agents and insurance brokers are the main distribution channels.