Church-based insurer ACS (NZ) Ltd, the former Ansvar New Zealand, has written to policyholders to inform them of a June 12 meeting in Christchurch.

The New Zealand High Court has directed ACS to hold the meeting to discuss a scheme of arrangement with its creditors – the claimants – so they may vote on approving the scheme and, if necessary, determine the members of an initial creditors’ committee.

Ansvar CEO Andrew Moon said previously that the scheme would only be triggered if ACS directors determine that liabilities exceed assets, or if creditors’ claims can no longer be met in full.

He told insuranceNEWS.com.au the scheme is being implemented to protect the interests and position of former clients and to ensure a “robust and effective claims management process” is in place.

UK parent Ecclesiastical has agreed to provide a further $NZ24 million ($18.5 million) cash injection, which will fund costs associated with additional reinsurance coverage, specialist claims personnel and professional advice from lawyers, accountants and actuaries.

Ecclesiastical has also extended the reinsurance cover of ACS up to $NZ570 million ($439.4 million) and provided an additional $NZ4.5 million ($3.5 million) share capital to fund payment of “adverse development reinsurance cover” for the February 2011 earthquake.

Dan Schwarzmann of PricewaterhouseCoopers (PWC) UK and Colin McCloy of PWC NZ are the proposed scheme administrators.

If the scheme is not approved, ACS says it will continue to manage claims, but could be “vulnerable to increasing claims” and other factors that may endanger its solvency.

It is anticipated the proposed scheme could continue for more than five years.