A.M. Best has removed from under review with negative implications and changed the Financial Strength Rating to a Non-Rating Designation of E (Under Regulatory Supervision) from B++ (Good) and the Long-Term Issuer Credit Rating (Long-Term ICR) to "e" from "bbb+" of CBL Insurance Limited (CBL) (New Zealand) following a regulatory action that placed the insurer in interim liquidation. Concurrently, A.M. Best has removed from under review with negative implications and withdrawn the Long-Term ICR of "bb+" of CBL Corp. Ltd. (CCL) (New Zealand) based on the same regulatory action.
These rating actions follow the High Court of New Zealand's announcement on Feb. 23, 2018, that it placed CBL in interim liquidation, following a request from the Reserve Bank of New Zealand.
A.M. Best had been closely monitoring the activity surrounding CBL since taking an earlier rating action on Feb. 6, 2018. The ratings of CCL and CBL were downgraded and placed under review with negative implications at that time following CCL’s announcement that CBL’s insurance reserves for its long claim-tail French construction insurance business needed to be strengthened, and due to the resulting capital strain and pending the completion of an intended capital raise within weeks. In addition, the under review status had reflected the need to assess the adequacy of the strengthened reserves and the corrective actions taken by management to address the causes of the reserve shortfall.