The liquidation of failed New Zealand insurer Western Pacific is unlikely to be completed in the next six months.

There is still “considerable work to be done” assessing and agreeing Canterbury earthquake claims and recovering reinsurance proceeds, liquidators David Ruscoe and Simon Thorn of Grant Thornton say.

A lack of funds has made it difficult to complete loss adjustment of claims, according to their latest report.

Loss adjusters stopped working for the company before liquidation in April 2011 because they had not been paid, but they are now assessing claims with the assurance their costs will be met.

A small number of claims will be examined initially, to recover reinsurance proceeds that can be used to carry out a wider assessment.

“This process is well under way and we are presently awaiting advice from engineers and quantity surveyors to enable completion of loss adjustment for the selected claims, following which a claim will be presented to the panel of reinsurers,” the report says.

One reinsurer has already proposed to settle its obligations with an amount equivalent to 80% of its estimated exposure.

This would mean a discount of $NZ554,118 ($458,012) and recovery of $NZ1.94 million ($1.61 million) after deduction of $NZ280,553 ($231,898) in unpaid premiums.

“We are presently assessing the merit of this proposal,” the liquidators say.

Debt collectors have continued to pursue $NZ749,629 ($619,625) owed to Western Pacific, including unremitted premiums from brokers.

Canterbury policyholders are the only secured creditors, with estimated claims from the quakes standing at more than $NZ48 million ($39.68 million).

Preferential creditors are the Inland Revenue, with a claim of $NZ87,559 ($72,374), and employees, who are owed $NZ117,932 ($97,479).

Unsecured creditor claims stand at $NZ18.76 million ($15.51 million).