Liquidators of bust Queenstown insurance company Western Pacific have cancelled policies and admitted claims won’t be paid in full.
David Ruscoe and Simon Thorn of Grant Thornton Christchurch issued a statement today (Tuesday) saying attempts to sell Western Pacific had been unsuccessful.
As a result, “Western Pacific was unable to provide insurance cover”, they’ve advised 7000 policy holders.
“The effect is the cancellation of all policies immediately.
“For those with claims for losses incurred before the [policy] cancellation, our claims department is operational,” the liquidators say.
They advise calling (09) 365 1642.
After releasing his media statement, Thorn spoke exclusively to Mountain Scene.
Clarifying the situation for policy holders, he urged them to contact Western Pacific if they’d incurred damage or loss before the policy cancellation – even if they don’t yet know how much they’ll be claiming.
“The total value of insurance claims will be many millions,” Thorn says.
“They haven’t been quantified – a number can’t be because they’re inside Christchurch’s red zone.”
Claimants shouldn’t expect to be paid in full either, he reveals.
While the liquidators have secured $257,000 in reinsurance money held in Singapore, another 14 foreign reinsurers may not come to the party.
“We’re expecting a shortfall on reinsured funds versus total claims – we don’t yet know what that is, that’s the only honest answer I can give you,” Thorn says.
Policyholders who don’t have an insurance claim become unsecured creditors and can claim for the outstanding portion of annual premiums, he confirms.
“They’re probably owed that because we can’t honour [the policy].”
Thorn pours cold water on recovering anything from Western Pacific offshore subsidiaries – with a book value of $560,000.
“It’s probably about as good as the company’s book of insurance – which nobody wanted,” he says.
The liquidators have told policy holders to expect a further report by the end of May.