Collapsed insurer owes creditors about $3.8m

Collapsed Queenstown insurer Western Pacific, with 7000 customers, owes creditors an initial estimated $3.8 million and has $1.9 million of unsettled insurance claims.

These are the findings of the first report from liquidators David Ruscoe and Simon Thorn of Grant Thornton.

A long list of Western Pacific Insurance creditors include the Earthquake Commission, global real estate business Colliers International, New Zealand's largest medical insurer Southern Cross, AA Insurance, JB Hi-Fi of Auckland, Queenstown newspaper Mountain Scene and various car panelbeating and crash-repair businesses around New Zealand.

The liquidators released the first report into the insurer's demise but could not give a total deficit and warned they were also unsure about accounting records. The company might owe more, the liquidators said.

"The company does not maintain its own accounting records ... the liquidators are unsure as to how up-to-date the information provided is."

The small New Zealand-owned insurer stopped writing new policies after chief executive Jeffrey McNally said February's quake "swamped us".

Western Pacific went into liquidation on April 1 and the liquidators called for creditors to lodge claims by April 28.

On the plus side of the ledger, the liquidators said, they were trying to claw back unpaid premiums.

"There is a significant amount of unpaid premium income due to the company which we are endeavouring to collect. We are also aware of amounts due from the company's reinsurance arrangements that we are seeking to recover," they said.

On the negative side, they said, many insurance claims were left unpaid.

"We have decided to keep the company's claims department operating as there is a large volume of claims that are yet to be assessed and determined. We are presently reviewing and checking that all client insurance policies in respect of which premiums have been paid, are registered with the company and are valid."

The company's shareholders are Karuell Properties of Queenstown, whose directors are Adele and Jeffrey McNally of Australia, and G L Smolenski Investments of Dunedin, whose directors are Gabrielle Martin and Graham Smolenski.

Smolenski was the developer and founding director of the luxury Millbrook Resort near Queenstown.

WESTERN PACIFIC

* Unsecured creditors: $3,881,537
* Unsettled insurance claims: $1,952,735

Source: Grant Thornton