Stamford Insurance steps in to CBL crisis

Move to restore peace of mind to homebuyers and builders affected by issues surrounding the insurer
Stamford Insurance steps in to CBL crisis
INSURANCE NEWS
By Krizzel Canlas
07 Mar 2018

Independent building warranty provider Stamford Insurance has announced a new scheme to protect CBL Insurance’s clients, following the multiple issues surrounding the firm.

On February 23, CBL Insurance was placed into interim liquidation, which Stamford said left nearly 10,000 homeowners with potentially worthless warranties.

Days after the announcement, Stamford said it secured support from Lloyd’s of London to “restore peace of mind to many homebuyers and builders caught up in the crisis.”

“The underwriters in London responded immediately to our request and are committed to providing New Zealand homebuyers with the finest building warranties,” Stamford director Duncan Colebrook said. “Lloyd’s can always be relied upon in a crisis and this, once again, underlines the importance of dealing only with the most stable and secure insurance providers.”

Stamford outlined how the scheme will protect both buyers and homeowners:

  • For buyers who have signed a contract and paid a deposit where work has yet to start, Stamford will cover the risk that they may lose their deposit if their builder becomes insolvent;
  • If construction has already started, Stamford will guard against builder insolvency and provide 10 years’ defects cover on completion;
  • For homeowners who have taken possession of their homes within the past 12 months and who may have lost their protection against major defects arising with their home, Stamford will offer them a new 10-year policy.

“We had to move quickly to prevent the situation spiralling out of control with many homebuyers possibly in breach of their mortgage conditions and dependent on this insurance to be able to proceed with their purchase. Builders, too, were worried for their clients,” Colebrook added.

Stamford said it will work closely with insurance agency Builtin, CBL’s main agent in New Zealand. People holding guarantees with CBL should contact Builtin for advice about the new arrangements, it added.

“We’re pleased that Stamford was able to move so quickly to support us and our clients,” Builtin director Keryl Rickard said. “It means that from today it is business as usual.”

 

Related stories:
FMA, NZX release statement on CBL
Troubles at CBL Insurance force Danish insurer into liquidation

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