Christchurch earthquake victims further embroiled in
liquidation claims with collapsed insurer Western Pacific
Insurance, of Queenstown, face refunds of 66c in the dollar,
but that return could be further eroded for some.
Estimated insurance claims on Western policies are up to
$48.32 million, but only $32.19 million is due from Western's
reinsurers' payouts, leaving a $16.13 million shortfall,
meaning a payment of 66c in the dollar.
Liquidators Grant Thornton have just released their 13th
report, to creditors or as statutory reports, since Western's
''We expect there will be a shortfall of funds available for
claims and also expect that the quantum of claims may
increase as assessment of same is completed,'' the
liquidators said in their most recent report.
No time frame was given, but in May liquidators said they
required at least another six months to wind up the
When contacted, the liquidators said that 66c in the dollar
was an average, and reinsurers' policies varied widely. Some
of the 80 claimants from September 2010 quake could get a
higher percentage, because of a higher cap on payouts, but
those in the second group of 100 claimants from the February
2011 quake have a lower cap and might get lower payments.
Boutique insurer Western Pacific's saga began with its
collapse in April 2011, as the first $6 million of
Christchurch earthquake claims rolled in, before claims
spiralled to $65 million.
It was later revealed that worldwide, Queenstown-based
Western's director Graham Smolenski and his brother-in-law,
Jeff McNally, had sold about 7000 insurance policies,
amounting to $10 billion of insurance cover.
After an earlier High Court decision in the liquidators'
favour over claims on the reinsurers' cash, there remain
outstanding unsecured creditor claims of $18.75 million,
which no longer rate a mention in reports.
The liquidators said they received $1.93 million in mid-June,
after a settlement was reached with an unidentified reinsurer
as the ''full and final settlement'' of its obligations.
In its previous report, Grant Thornton said an unidentified
reinsurer had proposed to settle its obligation immediately,
and pay $1.93 million, which represented a $554,118 discount.
A total of $280,553 in unpaid premiums owing to the reinsurer
was also deducted.
''A further [unspecified] claim for the company's greatest
loss has also been presented to the panel of reinsurers,''
Grant Thornton said.
It had kept the claims office open over the two months to the
end of August, liaised with loss adjusters, reviewed claims
and kept reinsurers appraised of claims, Grant Thornton said.
It also said it had continued recovery efforts ''to realise
the significant unremitted premiums'' being held by brokers.
Costs for the two months to August were $40,900, comprising
$22,000 to keep the claims department operating, $4700 in
legal fees and the balance, which went towards liquidators'