Insurance claims on failed New Zealand insurer Western Pacific have risen to $NZ61 million ($47 million), increasing the gap between claims and $NZ34 million ($26 million) that is due to the company from reinsurance.

The reinsurance money is Western Pacific’s major asset and the New Zealand High Court last week heard arguments on how the funds should be distributed.

The company’s liquidator has asked the court for a direction on whether the money should be distributed to all creditors or only to policyholders with claims from the September 2010 and February 22 earthquakes. The court has reserved its decision.

The second six-monthly report by liquidator Grant Thornton shows that Western Pacific’s claims have increased since their first report in August.

The company now has liabilities of $NZ64 million ($49 million), including the estimated $NZ61 million in claims, trade creditors owed $NZ1.1 million ($840,000), unexpired premiums of $NZ807,000 ($616,000) and broker commissions of $NZ10,967 ($8400).

In August the claims were estimated at $NZ46 million ($35 million) and a claims shortfall of $NZ14 million ($10 million) was calculated.

Apart from the reinsurance money, Western Pacific is owed $NZ1.4 million ($1 million) – mainly from brokers – and joint liquidator David Ruscoe told insuranceNEWS.com.au collecting the money is “a frustrating business”.

Joint liquidator Simon Thorn says recovery action is ongoing and $NZ52,846 ($40,000) has been collected.

The Inland Revenue is a preferential creditor for $NZ87,559 ($66,800) and employees have claimed $NZ117,932 ($90,000).

Mr Thorn says it is unlikely the liquidation will be completed within six months, as there is considerable work to be done in dealing with earthquake claims.