The central bank has released its affidavit to the Irish High Court supporting the appointment of an administrator to the Dublin-based insurance arm of CBL, and it paints a picture of a company growing too fast and with too few controls.
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The document showed the Central Bank of Ireland becoming increasingly concerned about the way CBL Insurance Europe, the Dublin-based subsidiary, was gaining business, and how it was being run, but the company was disputing the bank's assessment and rejecting suggestions to improve its position.
"The bank became concerned that both the insurer and CBLNZ (its primary reinsurer) were reserving at a level materially lower than appropriate," senior bank official Lisa O'Mahoney said in the affidavit.
Insurance companies are required to put aside enough money to cover future liabilities and claims from policy holders.
The Reserve Bank of New Zealand had been voicing similar concerns about the group and its insurance business in this country.
The Irish central bank said not only was the amount of reserves too low, but CBL was not calculating its reserves in a "prudent and reliable manner", and that the Dublin business was being run in a way that "deviated from normal standards".
However, CBL Ireland's lawyers told the central bank early last month that the level of reserves it wanted the company to hold was "excessive and disproportionate".
The company said the bank's direction in early February to stop doing new business would "fatally compromise" the company's efforts to improve its finances and the impact on the subsidiary and the wider CBL Group would be "irreversible and catastrophic".
Three weeks ago the RBNZ moved to put CBL Insurance in New Zealand into interim liquidation, which resulted in the parent CBL Corporation going into administration.
RBNZ deputy governor Geoff Bascand has told RNZ that it could not have intervened any sooner in the CBL group to prevent or at least minimised the financial damage.
The troubles that have engulfed the CBL group have resulted in thousands of people who bought insurance policies protecting the building of their houses being left without cover.
