IAG, Australia and New Zealand's largest insurer, bought AMI when the troubled company looked unable to pay out the claims from the continuing Christchurch earthquakes.
The Government has formed Southern Response, also based in Christchurch, which has responsibility for settling all claims by AMI customers for the earthquake damage which occurred before April 5.
With the completion of the transactions, AMI's 500,000 customers - including Clic Car Insurance customers - have had their insurance cover transferred automatically to a new company, sold to IAG and trading under the AMI name.
No action is required and all insurance cover will continue unchanged.
Finance Minister Bill English said the sale of AMI Insurance to IAG would provide certainty for policyholders, strengthen the Canterbury insurance market and reduce the likely cost to the Crown.
"The Government's backstop support for AMI was to ensure certainty for policyholders and for the Canterbury rebuild. This deal gives AMI policyholders certainty their earthquake claims will be met and they will continue to have insurance cover."
As part of the deal, IAG had agreed it would continue to offer insurance to AMI's customers, as well as all of its existing customers, on renewal and transfers throughout New Zealand. That was welcomed as it ensured ongoing insurance cover for 60% of the Canterbury market, Mr English said.
The purchase of AMI for $380 million also reduced the estimated final cost of Crown support for AMI from $335 million in the 2010-11 Crown accounts to about $100 million once all claims were paid out.
From Thursday, Southern Response was responsible for settling earthquake claims involving:
• More than 11,000 claims to 6670 Canterbury properties where damage exceeds EQC's $100,000 plus GST cap.
• Nearly 22,000 "out of scope" claims, for damage to paths, driveways and other external structures which are not covered by EQC.
• More than 3000 temporary accommodation claims which are not covered by EQC.
• Around 1500 other claims, including contents, loss of rent and motor vehicles.
The Government has appointed Nelson-based company director Ross Butler to chair Southern Response. He is chairman of the Nelson-Marlborough Institute of Technology, Mercer Investment Nominees and the Code Committee, Financial Advisers Act.
New structure
• AMI policyholders with earthquake-related claims are now customers of both the "new" AMI and Southern Response until their earthquake claim is settled.
• Southern Response is also financially responsible for a small number of claims resulting from events occurring before Thursday, such as those arising from the recent Nelson floods. AMI will be responsible for all claims for earthquakes and other events occurring since Thursday.
