Update: Statement on CBL Insurance Europe dac

12 March 2018 Press Release

Insurance

Affidavit of Lisa O'Mahony sworn 25 February 2018

CBL Insurance Europe Dac - FAQ

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.