Ansvar policyholders in New Zealand have voted in favour of a contingency scheme for settling claims should the company’s financial position deteriorate.

However, the Reserve Bank of New Zealand, which regulates insurers, has expressed concern at some aspects of the scheme and says there is “a greater than 25% chance in a shortage of assets to cover costs”.

The church-based insurer’s New Zealand operation, ACS (NZ) Ltd, cancelled its New Zealand policies late last year when it incurred earthquake-related claims of around $NZ700 million ($547 million).

Ansvar CEO Andrew Moon told insuranceNEWS.com.au the company’s board is considering the regulator’s concerns, including its comment about the 25% chance of an assets shortfall.

“We think it’s about 10%,” he said.

Mr Moon says he had not been sure how the vote would go, since a 50% support vote was needed to go ahead with the scheme.

“You can never be sure,” he said. “There was a mix of large claimants and small ones. If a couple of the larger claimants – who might be 10% or more of the total – had voted against the scheme…It was very heartening to get that 95%.”

While he described the meeting as an “outstanding success”, the Reserve Bank says the scheme approved at the meeting is “based on an inadequate injection of capital” and has the potential for an “unfair distribution” between the claimants.

“In their view, things were more uncertain,” Mr Moon said. “We maintain that things are solvent.”

The regulator has asked for more information on how ACS proposes to meet the more stringent solvency requirements that will come into effect in New Zealand from the end of this month under the Insurance (Prudential Supervision) Act 2010.

In its response to the Reserve Bank, ACS says actuarial analysis by the company “indicates it will be able to meet this new standard also”.

“The greater the risk of the company’s insolvency, the more the scheme becomes desirable or an attractive alternative to liquidation.”

An application for approval of the scheme will be heard in the High Court in Auckland tomorrow.

Mr Moon says “some slight changes” may be made to the scheme, but they are “not material”.