Update: Statement on CBL Insurance Europe dac (Under Administration)

Affidavit of Lisa O'Mahony sworn 25 February 2018

CBL Insurance Europe Dac - FAQ

12 March 2020

On 20 February 2020, the Central Bank of Ireland (“Central Bank”) presented a petition for the winding up of CBL Insurance Europe Dac (Under Administration) (“CBLIE” or “the Company”) to the High Court. 

The matter was heard by the High Court on 12 March 2020, where an Order for the winding-up of CBLIE, and the appointment of Mr Kieran Wallace and Mr Cormac O’Connor of KPMG Dublin as Joint Liquidators, was made. This appointment takes immediate effect.

By way of background, CBLIE has been in Administration since 26 February 2018 when the Central Bank made an application to the High Court due to concerns about the Company.

The Central Bank took these actions in the interest of protecting policyholders.

Impacted policyholders are advised to make contact with the Joint Liquidators of CBLIE for ongoing updates with regard to the Liquidation and the status of any remaining policies held. Further information for impacted policyholders can be found here: http://cblinsuranceeurope.com/.

20 February 2020

On foot of an update by the Administrator on 6 December 2019, which indicated a deteriorating financial position, the Central Bank of Ireland (“Central Bank”) directed CBL Insurance Europe Dac (“CBLIE”) to cease making claims payments with immediate effect. The Central Bank took this action in the interest of protecting policyholders.

Having considered the financial position of CBLIE, and steps taken by the Administrator which were unable to restore the company to a sound financial footing, the Central Bank, on the 20 February 2020, has lodged a petition with the High Court to seek a winding-up order and to have a Liquidator appointed to CBLIE. This action is also taken in the best interest of protecting policyholders.

The matter is due for hearing before the High Court on 12 March 2020. A further update will be provided by the Central Bank following this hearing.

Further information http://cblinsuranceeurope.com/

11 December 2019

On foot of an update by the Administrator of CBL Insurance Europe dac (CBLIE) on 6 December 2019, which indicated a deteriorating financial position, the Central Bank of Ireland has directed CBLIE to cease making claims payments with immediate effect. The Central Bank took this action in the interest of protecting policyholders. The Central Bank will require the administrator to complete further work and provide further information in relation to the financial position of the firm by the end of January. A further update will be provided after this information has been reviewed.

CBL regulated by the Central Bank of Ireland but its authorisation was withdrawn in 2019, save to the extent necessary or appropriate for the continued appointment of the administrator and his ability to carry on the activities of an insurance undertaking in order to achieve the objectives of the administration.

The Central Bank is recommending that policyholders contact their broker to arrange alternative cover as soon as possible.  If you have any queries on your policy you should contact your broker or CBL.

Further information http://cblinsuranceeurope.com/.

20 February 2019

On 19 February 2019 the Central Bank withdrew CBL’s authorisation as granted under the European Union (Insurance and Reinsurance) regulations 2015, save to the extent necessary or appropriate for the continued appointment of the administrator and his ability to carry on the activities of an insurance undertaking in order to achieve the objectives of the administration.

The remaining authorisation held by CBL does not affect the Administrator’s ability to carry on these activities which includes the continued payment of all valid claims.

These activities are carried on with the consent and under the supervision of the Central Bank of Ireland.

12 November 2018

On 12 November 2018 the High Court in New Zealand appointed Kare Johnstone and Andrew Grenfell, partners of McGrath Nichol, as liquidators of CBL Insurance Ltd. The Reserve Bank of New Zealand has welcomed the placement of CBL Insurance Ltd into liquidation, without the need for a contested hearing. Further details are available on the Reserve Bank of New Zealand’s website.

12 March 2018

Following the appointment of a provisional administrator to CBL Insurance Europe dac (CBLIE) on 26 February 2018, the Central Bank has made an application today to the High Court to have an Administrator appointed to CBLIE. Kieran Wallace of KPMG was appointed as Administrator. The Central Bank took this action to protect CBLIE policyholders.

Existing policies continue to remain in force. However, the Central Bank is recommending that policyholders contact the firm directly, or their broker (if the policy was bought through a broker) to arrange alternative cover as soon as possible.

26 February 2018

The Central Bank of Ireland (Central Bank) has made an application today to the High Court to have a provisional administrator appointed to CBL Insurance Europe dac (CBLIE). Kieran Wallace of KPMG was appointed as provisional administrator.

The Central Bank took this action to protect CBLIE policyholders. Existing policies continue to remain in force. However, the Central Bank is recommending that policyholders contact the firm directly, or their broker (if the policy was bought through a broker) to arrange alternative cover as soon as possible.

Steps leading to the application

The Central Bank has made this application as it has formed the view that CBLIE is in breach of a number of regulatory requirements and is in a distressed financial position.

In the absence of taking this action, it is the Central Bank’s view that there could be a disorderly failure of CBLIE.

The Central Bank has been engaging with CBLIE over a number of months seeking remediation of its regulatory issues, including the weaknesses in its financial position. The Central Bank is of the view that the inability of CBLIE to address these issues has resulted in it being necessary to apply for a provisional administrator to be appointed to CBLIE. The Central Bank is of the view that CBLIE has been provided with the opportunity to address the issues concerned and, in the opinion of the Central Bank, they have not been adequately addressed.

The decision to apply to the High Court to put CBLIE into administration was made by Ed Sibley, Deputy Governor (Prudential Regulation) of the Central Bank. The legal grounds under which the Deputy Governor made this decision are set out in the Insurance (No. 2) Act 1983 and are as follows that:

1. The manner in which the business of CBLIE is being or has been conducted has failed to make adequate provision for its debts, including contingent and prospective liabilities.
2. The business of CBLIE is being or has been so conducted as to jeopardise or prejudice the rights and interests of persons arising under policies issued by CBLIE.
3. CBLIE has become unable to comply with its regulatory requirements in a material respect.

The appointment of the provisional administrator will assist in the maintenance, in the public interest, of the proper and orderly regulation and conduct of insurance business.

Next Steps

The Central Bank intends to publish the underlying affidavit by Lisa O’Mahony of the Central Bank’s Insurance Supervision Division, which formed part of today’s High Court application, on centralbank.ie following the full hearing of the application for the administration of CBLIE.

The European Insurance and Occupational Pensions Authority’s (EIOPA) Cross-border Platform of Collaboration has been set up based on the Decision on the Collaboration of the Insurance Supervisory Authorities of 30 January 2017. The Central Bank continues to work with other European Regulators and EIOPA on this matter and the Central Bank will publish further updates on its website as they become available.

23 February 2018

The High Court of New Zealand has placed CBL Insurance Limited into interim liquidation, following an application by the Reserve Bank of New Zealand. CBL Insurance is a major reinsurer to CBL Insurance Europe DAC. The Central Bank of Ireland is engaging with the Reserve Bank of New Zealand, EIOPA and other European Regulators. The Central Bank of Ireland is considering next steps. We will publish updates on our website as they become available.

19 February 2018

CBL Insurance Europe dac (CBLIE) is an insurance firm authorised and regulated by the Central Bank of Ireland. The principal operating activity of CBLIE is to provide a range of non-life insurance products in Ireland and in a number of countries within the European Union on a freedom of services basis. CBLIE specialises in construction related credit and financial surety insurance, professional indemnity insurance, property insurance, and travel bonding. These products are distributed through channels including Managing General Agents (MGAs) and insurance brokers.

The Central Bank has today, 19 February 2018, issued a direction to CBLIE instructing it to cease writing business with immediate effect, until further notice.

CBLIE continues to operate and existing policies continue to remain in force.

The Central Bank has required CBLIE to write to all appointed insurance brokers and distribution partners to inform them of the direction. The Central Bank has also requested that all appointed brokers and distribution partners, with which CBLIE is connected, inform policyholders. Any existing CBLIE policyholders who have concerns about their policy should contact the firm directly, or their broker (if the policy was bought through a broker).

The European Insurance and Occupational Pensions Authority’s (EIOPA) Cross-border Platform of Collaboration has been set up based on the Decision on the Collaboration of the Insurance Supervisory Authorities of 30 January 2017. The Central Bank continues to work with other European Regulators and EIOPA on this matter and the Central Bank will publish further updates on its website as they become available.

Notes

CBL Insurance Europe dac is an insurance firm authorised and regulated by the Central Bank of Ireland. The principal operating activity of CBLIE is to provide a range of non-life insurance products in Ireland and in a number of countries within the European Union on a freedom of services basis. CBLIE specialises in construction related credit and financial surety insurance, professional indemnity insurance, property insurance, and travel bonding. These products are distributed through channels including Managing General Agents (MGAs) and insurance brokers.

CBL Insurance Europe dac is regulated by the Central Bank of Ireland as a Non-Life Insurance Undertaking under the European Union (Insurance and Reinsurance) Regulations 2015 (SI No. 485 of 2015).

CBL Insurance Europe dac is a wholly owned subsidiary of CBL Corporation Limited, which is incorporated and domiciled in New Zealand.

Insurers from EU/EEA state can conduct insurance business in another EU/EEA state either on a freedom of establishment / branch basis, or on a freedom of services (FOS) basis. Insurers accessing the Irish market on an FOS basis typically use Irish-authorised insurance intermediaries known as Managing General Agents (MGAs). The MGA administers the FOS Insurer’s business, which can range from a full service model (e.g. product development, pricing, underwriting, and claim handling) to a wholesale distribution only model operating within set criteria.