Regulatory Alerts2022-05-17
KPMG Examination of Reserve Uncertainty for ACS NZ at 31 December 2011
KPMG Actuarial Pty Ltd, acting at the direction of the Reserve Bank of New Zealand, examined the outstanding claims and claims handling expense reserve uncertainty for ACS (NZ) Limited as of 31 December 2011. The report reveals extremely high uncertainty in reserves, with KPMG's central estimates significantly exceeding ACS's own provisions and projecting that the Lyttelton earthquake event will exhaust all available reinsurance, including the Adverse Development Cover. Key risks include substantial potential shortfalls in reinsurance recoveries due to exchange rate fluctuations and commercial disputes, alongside significant uncertainty regarding the final resolution of specific coverage and policy wording issues.
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