Ansvar plan for insolvency alarms claimants
cerned that proportional payments may decline so that late settlers are disadvantaged and first come are best served.
But Justice Venning said on balance, he thought the scheme was fair and was in the interests of policyholders. And a significant factor weighing in favour of the scheme was that $22m capital injection offered by EIO.
The central bank says it will continue in its role as prudential supervisor of the company and ACS is obliged to comply with its requirements.
The Reserve Bank thinks the parent company has an obligation to continue support for ASC and so do customers, but it says EIO has effectively distanced itself from ACS and will not provide further backing other than what is in the scheme.
Reserve Bank head of prudential supervision Toby Fiennes, said the bank’s position is simple.
‘‘We do expect parent companies to stand behind their subsidiaries as far as they can. We don’t have detailed knowledge of the position of the parent but certainly we would expect . . . any parent to continue to make support available to its subsidiaries as needed.’’
‘‘What the scheme does and what the actions of ACS, and Ecclesiastical . . . effectively distancing itself from ACS, what it’s done is ruled out further contributions from the parent should that become necessary.’’
On its website, Ecclesiastical Insurance’s slogan is ‘‘Always on your side’’.
It’s unlikely customers of its New Zealand subsidiary would agree.
Policyholders have one more week to find out what the Reserve Bank’s June 30 deadline will mean for their claims, and what action the Reserve Bank may take.
Seeking answers: