On 26 February 2018, the Central Bank of Ireland (the “Central Bank”) made an application to the High Court to have an administrator appointed to CBL Insurance Europe DAC (under Administration) (“CBLIE”). Kieran Wallace of KPMG was appointed as Administrator. This appointment was confirmed on 12 March 2018.

On 9 December 2019, on foot of an update by the Administrator which indicated a deteriorating financial position, the Central Bank directed CBLIE to cease making claims payments with immediate effect.

The Central Bank lodged a petition with the Irish High Court seeking the winding-up of CBLIE on 20 February 2020. The Central Bank took this action in the interest of protecting all policyholders.

On 12 March 2020, an order was granted for the winding up of CBLIE and Kieran Wallace and Cormac O’Connor of KPMG were appointed as joint liquidators

As a matter of Irish law, the liquidation is deemed to have commenced on 20 February 2020 and that is the relevant date for the purpose of the liquidation.

The Joint Liquidators have applied to the High Court for directions as to determine the impact of the liquidation on policies of insurance written by CBLIE and to seek the Court’s guidance on how claims arising under those policies are to be treated in the liquidation. The initial hearing took place the 27th November 2020 and the full hearing the 3rd and 4th of March 2021. The Judge reserved judgement following the hearing and we await his judgement in the matter.

CBLIE’s principal reinsurer was another company in the CBL Group, CBL Insurance Limited, and this company was placed into liquidation in New Zealand in November 2018

The reinsurer’s inability to cover its liabilities to CBLIE coupled with a continuation of reserve deterioration in certain business lines as well as difficulties encountered in the collection of some of CBLIE’s assets led to CBLIE becoming balance sheet insolvent.

Within an Administration, the key duty of the Administrator is to continue the business as a going concern while seeking to restore the company to a sound financial and commercial footing.

In contrast a Liquidator’s duty is to realise the assets of the company in order to make distributions to the company’s creditors in order of priority before the company is finally dissolved.

The Central Bank has withdrawn CBLIE’s authorisation under the EU (Insurance and Reinsurance) Regulations 2015 to operate as an insurance company, save to the extent necessary for the effective winding up of CBLIE.  The remaining authorisation of CBLIE permits the Joint Liquidators to pursue the activities of an insurance undertaking only insofar as those activities are necessary or appropriate to achieve the objectives of the liquidation.  The Joint Liquidators are not otherwise authorised to carry on insurance activities and are not authorised to enter into new contracts or renew existing contracts.

As a result of the liquidation of CBLIE and the withdrawal of authorisation, there are varying implications for policyholders which depend on the terms of the policy some of which include the following:

• it is possible that, in accordance with the terms of your Policy, the Policy automatically terminates on the date of the liquidation of CBLIE or on the date of withdrawal of authorisation of CBLIE under the EU (Insurance and Reinsurance) Regulations 2015, i.e. on 12 March 2020, or

• it is also possible that, in accordance with the terms of your Policy, the Policy will terminate after receipt of written confirmation from the liquidators advising of the liquidation of CBLIE and withdrawal of authorisation of CBLIE under the EU (Insurance and Reinsurance) Regulations 2015, or within a period of 40 days from this liquidation or withdrawal, or

• your Policy may not automatically terminate. However due to CBLIE being placed into liquidation, it is no longer in a position to continue performing its obligations under the Policy and, as such, coverage for risks occurring beyond the date of the liquidation will not be provided.

We have been advised and are of the view that the proper interpretation of the relevant provisions of the Solvency II Regulations and of other applicable provisions of Irish legislation, is that only insurance claims that arose from insurable events that occurred before the commencement of the winding-up of CBLIE on 20 February 2020 (whether or not notified to CBLIE before that date) will be provable as debts in the liquidation of CBLIE.

We consider however that it is necessary to get the directions of the Irish High Court to confirm this interpretation.  To the extent necessary, we will also seek directions confirming that the insurance policies written by CBLIE ceased to produce effects on 20 February 2020.

The Joint Liquidators have submitted a Directions Application to the Irish Courts which will provide clarity on all relevant matters which have arisen in the winding up of the Company. The initial hearing took place the 27th November 2020 and the full hearing the 3rd and 4th of March 2021. The Judge reserved judgement following the hearing and we await his judgement in the matter.

In the meantime, we recommend that you take immediate steps to put in place an alternative insurance policy to cover any claims that arise from events since 20 February 2020, and proceed on the basis that any claims arising from such events are not going to be provable debts in the liquidation of CBLIE.

The Joint Liquidators will write to policy holders as soon as practicable to notify them of the appointment and the impact of the appointment on their policy of insurance.

In the interim it is recommended that you review your policy documentation and seek relevant advices to determine the impact of the liquidation upon your Policy.

We have been advised and are of the view that the proper interpretation of the relevant provisions of the Solvency II Regulations and of other applicable provisions of Irish legislation, is that you are entitled to lodge a claim for any amount which, under the terms of the Policy, is owed by CBLIE to you as at the date of the commencement of the winding-up of CBLIE on 20 February 2020 (whether or not notified to CBLIE before that date).

As we are advised that CBLIE is no longer on risk for the payment of claims that arise from insurable events that occurred or that occur after 20 February 2020, you are entitled to lodge a claim for damages for the proportion of  the value of your insurance premium which relates to the period of time from 20 February 2020 until the end of the period of coverage which you have paid but for which you are no longer covered.

We consider however that it is necessary to get the directions of the Irish High Court to confirm this interpretation.  To the extent necessary, we will also seek directions confirming that the insurance policies written by CBLIE ceased to produce effects on 20 February 2020.

The Joint Liquidators have submitted a Directions Application to the Irish Courts which will provide clarity on all relevant matters which have arisen in the winding up of the Company. The initial hearing took place the 27th November 2020 and the full hearing the 3rd and 4th of March 2021. The Judge reserved judgement following the hearing and we await his judgement in the matter.

In the meantime, we recommend that you take immediate steps to put in place an alternative insurance policy to cover any claims that arise from events since 20 February 2020, and proceed on the basis that any claims arising from such events are not going to be provable debts in the liquidation of CBLIE. Please note that the Joint Liquidators will fix a date in the future by which all claims will need to be notified in accordance with the instructions outlined below. This date will be notified to you once fixed.

If you have an existing claim (or a claim that arose from an insurable event that occurred before the commencement of the winding-up but which has not yet been notified to CBLIE), please notify this claim to your local claims handler, together with copies of documents supporting your claim.

If your local claims handler is unable or unwilling to handle (receive) the claim, you can notify the claim to the liquidation estate directly by submitting a claim online at the following link:

“Submit a Claim”.

Alternatively, you can submit your claim directly, together with copies of documents supporting your claim, and particulars of:

1. the nature of your claim;

2. the date on which it arose; and

3. the amount of your claim.

You can send this information to us at the following address:

Kieran Wallace and Cormac O’Connor

Joint Liquidators for CBL Insurance Europe DAC (in liquidation)

C/O KPMG, 1 Stokes Place, St Stephens Green, Dublin 2, D02DE03, Ireland.

Due to the insolvency of CBLIE, agreed claims (or claims yet to be agreed) are unlikely to be paid in full but rather will be paid by means of a dividend in the liquidation. It is too early in the liquidation to estimate the likely timing or quantum of any such dividend. The Joint Liquidators have submitted a Directions Application to the Irish Courts which will provide clarity on the categorisation of claims within the liquidation. The initial hearing took place the 27th November 2020 and the full hearing the 3rd and 4th of March 2021. The Judge reserved judgement following the hearing and we await his judgement in the matter.

There is currently no deadline set for the submission of claims, as soon as a deadline is set it will be notified to you.

Upon the Order for the Winding-Up of CBLIE by the Irish High Court, it is our view that the insurance policies written by CBLIE ceased to produce effects on the date of the liquidation, 20 February 2020.

We consider however that it is necessary to get the directions of the Irish High Court to confirm this interpretation.

The Joint Liquidators have submitted a Directions Application to the Irish Courts which will provide clarity on all relevant matters which have arisen in the winding up of the Company. The initial hearing took place the 27th November 2020 and the full hearing the 3rd and 4th of March 2021. The Judge reserved judgement following the hearing and we await his judgement in the matter.

In the meantime, we recommend that you take immediate steps to put in place an alternative insurance policy to cover any claims that arise from events since 20 February 2020.

The Joint Liquidators have not as yet fixed a deadline for the submission of claims but will do so in the future. You will be notified of the date once fixed. Please note that failure to submit your claim by the deadline will have the following consequences:

a) You will be excluded from the benefit of any dividend distribution made before your claim is proved; and

b) Any priority status that you may have may be prejudiced.

Claimants should not expect to have agreed claims paid in full given the insolvency of the Company but will receive a proportion of their claim by way of a dividend payment from the liquidation.

While it is still not possible to determine the timing or quantum of any dividend payments, the Joint Liquidators have submitted a Directions application to the Irish Courts which will provide clarity on the categorisation of claims within the liquidation. The initial hearing took place the 27th November 2020 and the full hearing the 3rd and 4th of March 2021. The Judge reserved judgement following the hearing and we await his judgement in the matter.

The Joint Liquidators will consider making interim dividend payments during the liquidation process if possible.

To the extent that your policy of insurance is not already terminated upon liquidation, it is possible to cancel your policy.

In order to cancel your policy, you might please contact your broker directly. Alternatively, you might please forward this request to the following address:

Policyqueries.cblie@kpmg.ie

You should take your own advice prior to proceeding with a cancellation and in particular you should consider the implications for any claim which you might otherwise be able to make against a local compensation scheme.

Depending on the terms of your policy you may be able to make a claim for a refund of premium. However it should be noted that it is possible that the full or a pro-rata premium reflecting time on risk may still be payable to the Company.

There are certain compensation funds which seek to reimburse claimants when an insurance company is in default. However, compensation funds vary from one jurisdiction to the next and it is dependent upon the specific nature of your policy of insurance as to whether a claim can be made to a compensation or guarantee fund.

It is recommended that you seek relevant advices to determine if you can access a compensation fund. You should contact your broker directly or alternatively, you might please submit a query to the following address:

Policyqueries.cblie@kpmg.ie

The Joint Liquidators will work with the respective Guarantee Fund/Compensation Scheme to process the claim.  Please contact your claims handler in the first instance in order to process your claim.

UK, Danish and certain Irish policyholders may be able to access statutory compensation funds, subject to their eligibility criteria. For all other policies written by CBLIE, it is unlikely that policyholders will be eligible for compensation given the nature of the risk insured.

Further information is available on our website at COMPENSATION SCHEMES

It is possible that an insurance policy was taken out on your behalf by a Broker, Intermediary or Managing General Agent (MGA).

Please contact us at policyqueries.cblie@kpmg.ie if you do not believe you have a valid Insurance Contract with CBLIE, or if your contract has been terminated/expired.

Claims which are afforded preferential status in the liquidation of an Irish company are set out in the Companies Act, 2014 (see section 621(2) of that Act in particular).

An advertisement for preferential claims will be made during the course of the liquidation giving creditors a specified period of time within which to lodge a claim.

Any creditor wishing to submit a claim in the interim can do so by submitting their claim in writing to Kieran Wallace and Cormac O’Connor, Liquidators of CBL Insurance Europe DAC (in liquidation) care of KPMG, 1 Stokes Place, St Stephens Green, Dublin 2,D02DE03,Ireland

The First Schedule of the Bankruptcy Act 1988 ( as amended), which has been incorporated by Section 619 of the Companies Act 2014 for use in liquidations, gives a number of options to a secured creditor.  Typically, secured creditors do not participate in the proof of debt process.

We strongly recommend that each secured creditor takes local law advice before lodging a claim in the liquidation so that it clearly understands the consequences of doing so.

In the first instance, you might please contact your broker directly.

Alternatively, you might an email enquiry to the following address:

Policyqueries.cblie@kpmg.ie

As advised following our appointment, the Joint Liquidators are seeking the directions of the Irish High Court to determine the impact of the liquidation on policies of insurance written by CBLIE and to seek the Court’s guidance on how claims arising under those policies are to be treated in the liquidation. Once the High Court gives its directions, the Joint Liquidators will be able to commence admitting eligible claims in the liquidation and confirm whether those claims rank as insurance claims or as unsecured claims.

The Directions application does not directly impact on your individual claim, but the outcome of the application will determine the admissibility of particular types of claims in the liquidation and will confirm whether they will rank as insurance claims or unsecured claims.

Under EU and Irish legislation on insurance law, any claim that meets the criteria for an ‘insurance claim’ (as defined in the legislation) has priority over the majority of other creditor claims in the liquidation of an insurance company. By contrast, unsecured claims ranks after ‘insurance claims,’ secured claims and preferential claims and dividends to unsecured creditors will be shared pari passu (or equally) with each other. This means that policyholders whose claims constitute ‘insurance claims’ will receive a higher dividend than policyholders whose claims rank as unsecured claims in the liquidation.

No, this is not a deadline for the submission of your claim. Any deadline for submission of claims will be notified to claimants via post and/or CBLIE’s website. In the event there is a dividend available to pay claims to any class of creditor, advertisements will be placed to notify creditors of this.

No, you do not need to appear or be represented in Court, but you may choose to do so if you wish. As set out in the notice, by Order dated 2 October 2020, the High Court directed that should any person wish to participate in the Directions Application they should notify McCann FitzGerald, solicitors for the Joint Liquidators, of their intention to do so, on or before 5pm on Friday 20 November 2020.

Any party who does so will be provided with a copy of the Directions Application (including an ex parte docket, affidavit and exhibit). Correspondence should be addressed by email to grace.armstrong@mccannfitzgerald.com or by post to McCann FitzGerald, Riverside One, Sir John Rogerson’s Quay, Dublin 2, marked for the attention of Grace Armstrong.

Claimants should not expect to have agreed claims paid in full given the insolvency of CBLIE but will receive a proportion of their claim by way of a dividend payment from the liquidation.

While it is not possible at this stage to determine the timing or quantum of any dividend payments, the Joint Liquidators are committed to working as expeditiously as possible to clarify all relevant matters to allow a dividend to be paid as early as possible in the liquidation.

If it is possible to do so, the Joint Liquidators may make interim dividend payments to claimants during the liquidation process.

The High Court has not yet allocated a date for the hearing of the Directions Application. We will update CBLIE’s website as soon as a hearing date has been allocated, and/or whenever there is a material update in relation to the Directions Application.

The purpose of the meeting is to enable CBLIE’s creditors to determine by resolution whether or not a committee of inspection is to be appointed and if one is formed, to decide who the members of the committee are. The meeting will be chaired by the Joint Liquidators.

The purpose of the Committee of Inspection is to assist the Joint Liquidators in the timely wind-up of CBLIE and to approve the Liquidators’ remuneration and costs in due course.

A minimum of 3 and a maximum of five creditors can be appointed to the Committee. If a Committee is formed, CBLIE can also nominate up to three members to sit on the Committee.

The meeting will be held via Zoom given the current Covid-19 restrictions around travel within Europe.

Proxies are also available on CBLIE’s website and if you wish to attend the Zoom meeting please confirm to Colm Fitzpatrick by email: colm.fitzpatrick@kpmg.ie and forward the completed proxies if you are a body corporate. Individuals do not need to complete the proxies.

Please note that only creditors who return each of the following (“Participation Documents”) by email to colm.fitzpatrick@kpmg.ie, by no later than 5p.m. on 17 November(the “Deadline”) are entitled to attend and vote, either in person, by a duly authorised representative, if a corporation, or by proxy at the meeting:

• Their completed and signed proxy forms, unless an individual creditor is attending in person, in which case a proxy form is not required but evidence of his/her personal identity (for example a passport or other picture identification) together with his/her corresponding email address is required, along with details of their claim;

• If a corporate, evidence of corporate authority (a valid power of attorney, and/or board authority) and evidence of his/her personal identity (for example a passport or other picture identification) together with his/her corresponding email address and details of their claim;

• If a proxy (other than the Chair) intends to attend and vote at the meeting, evidence of his/her personal identity (for example a passport or other picture identification) together with his/her corresponding email address and details of the claim of the Company they are representing.

Failure to deliver all of the Participation Documents by the Deadline will mean that voting instructions contained in the proxy forms will be disregarded for the purposes of voting at the meeting.

Creditors will be able to see and hear the Joint Liquidators and will have an opportunity to raise questions and receive answers during the meeting. Participants will be required to identify themselves for the purpose of communicating and/or voting on resolutions.

There is no remuneration paid to members of the committee of inspection and under the Companies Act 2014 no members can profit from being a member of the Committee.

No, being a member of the Committee of Inspection has no effect on the standing of your claim in the liquidation, nor can it improve in any way the ranking of your claim.

Meetings will be held periodically and the joint liquidators or any member of the committee may also call a meeting of the committee as and when he or she thinks necessary. Meetings will take place until the conclusion of the liquidation, which is expected to take a number of years. Once formed, the Committee will act by a majority of the members present (section 668(2)). The quorum for a Committee meeting is a majority of its members.