Failed New Zealand insurer Western Pacific is expected to have a claims shortfall of $NZ14.2 million ($11.3 million), according to the latest report to creditors.

Liquidators David Ruscoe and Simon Thorn of Grant Thornton have filed an application with the NZ High Court for directions on which policyholders are entitled to reinsurance of $NZ34 million ($27 million) payable from the two major earthquakes on September 4, 2010 and February 22.

They are also pursuing brokers for more than $NZ1 million ($796,463) in premiums.

The reinsurance money is Western Pacific’s major asset to cover total claims of $NZ46 million ($36.6 million).

The liquidators have asked the court to direct that the money can be paid to all creditors and not just those who have claimed for loss arising from the two earthquakes.

Western Pacific’s earthquake claims total $NZ39.9 million ($29.38 million) and these claimants may argue they should be paid before other creditors.

The earthquake claims have been split into a group known as the Canterbury Policy Holders, and the court has appointed barrister Jared Ormsby of Christchurch firm Wynn Williams to represent them.

The matter will go to court on September 12, when a hearing date is likely to be set.

Liquidator David Ruscoe told insuranceNEWS.com.au that he will also be taking legal action against brokers who have failed to pay more than $NZ1 million to the company.

Mr Ruscoe says brokers’ failure to pay is holding up the liquidation.

The creditors’ report shows claims of $NZ13.8 million ($10.9 million) from the first earthquake and $NZ26 million ($20.6 million) from the second quake.

Other New Zealand claims total $NZ1.2 million ($953,300). Australian claims total $NZ2.9 million ($2.3 million) and Pacific and other claims are $NZ2 million ($1.59 million).

The liquidators have asked the court to allow them to refund the reinsurance premium from the reinsurance payout, as well as to use the $NZ34 million to pay their own fees and expenses if there are no other funds available.