Important Alert: SRA Participating Insurer's Parent company placed in interim Liquidation
On the 7th February 2018, Financial security agency AM Best issued CBL Insurance with an amended financial strength rating of B ++ under review with negative implications. The catalyst for this downgrade was a suspension of shares on the New Zealand Stock market in early February due to regulatory authorities concluding that CBL needed to raise capital to shore up claim reserves in its most exposed Insurance lines.
The situation has since worsened and the New Zealand regulator via the High Court as of 23rd February 2018 has placed CBL Insurance into interim liquidation. This should be of particular interest to Insured firms of CBL Insurance Europe, a wholly owned subsidiary of CBL Insurance. CBL Insurance Europe is still being supported by the CBL Corporation as things stand.
CBL Insurance Europe are regulated by the central bank of Ireland, on the 19th February, the Central Bank of Ireland issued a direction to CBL Insurance Europe that it must cease underwriting new Insurance business with immediate effect, until further notice. The Irish Regulator has commented that CBL Insurance Europe continues to operate and existing policies continue to remain in force. Our advice for CBL policyholders is to continue to monitor the situation closely, developments may occur very quickly and you need to ensure that you are best positioned to react, should the need arise.
There is however, a more immediate impact for policyholders who purchase a “rolling” monthly policy with CBL. The Central Bank of Ireland's directive means that any continuous policyholder will not be receiving further coverage moving forward as this constitutes “new insurance business”. Our advice to the aforementioned firms is to immediately look to source an alternative coverage solution.
If you are a policyholder of CBL Insurance Europe and are seeking further advice or you need urgent assistance in sourcing alternative coverage, please do contact us a member of the Lockton team on the numbers below as we have numerous alternative solutions for you firms of your size.
If you are not a CBL Insured and would like to seek alternative options for your forthcoming PII renewal please also contact myself, Marc Rowson or another member of the Lockton Solicitor team.
Marc Rowson Brian Boehmer
Vice President Partner
Tel 0207 933 2034 0207 933 2083
Call: 0330 123 870