DUBLIN, Feb 26 (Reuters) - Ireland has appointed an administrator for CBL Insurance Europe to avoid the risk of a “disorderly failure”, the Irish Central Bank said on Monday, following a similar move against another subsidiary of CBL Corp Ltd in New Zealand.
The insurer disclosed earlier this month that the bank was reviewing the adequacy of the company’s reserves in its French construction insurance business.
New Zealand’s High Court on Friday placed CBL Insurance Ltd, the main subsidiary of CBL Corporation Ltd, in interim liquidation.
On Monday, the Irish Central Bank said in a statement that CBL Insurance Europe (CBLIE) was in a “distressed financial position” and had failed to address issues brought up in recent months.
It said its application to the Irish High Court to have an administrator appointed to CBLIE was approved on Monday.
“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’s statement said.
CBLIE, which underwrites construction-related insurance, is registered in Ireland and authorised to write business in France as well as Ireland, Belgium, Denmark, France, Italy, Norway, Romania, Spain, Sweden and Britain.
The Irish Central Bank, which regulates the insurance industry in Ireland, last week ordered CBL Insurance Europe to cease writing new business immediately. The bank said existing policies remain in force but policyholders should arrange alternative cover as soon as possible.
CBL shares have not traded since the company requested a halt on Feb. 5. The company is due to report half-year results on Feb. 27 and has said it is “working towards a capital raise”. (Reporting by Conor Humphries, editing by Larry King)