FOREIGN INSURANCE COMPANIES.

Press, Volume LXVIII, Issue 14293, 2 March 1912, Page 9

FOREIGN INSURANCE COMPANIES.

A TEST CASE

(-BESS ASSOCIATION TELEGRAM.) WELLINGTON, March 1. Foreign companies, that is, companies incorporated beyond Now Zealand, aro required under tho Foreign Insurance. Dposits' Act, 1908, to make a deposit of £10,000 beforo carrying on insuranco business in New Zealand. If a company should assign part of its benefits in a floating or open policy issued by Lloyds underwriters, would that company bo acting as agent for tho underwriters, or would it bo carrying' on insurance business itself, nnd thus be liable for the deposit of £10,000. It was to determine this question that a declaratory judgment was to-day sought in the Supremo Court before Mr Justice Sim. The plaintiffs were Dalgoty and Co., merchants incorporated in England, but carrying on business in Wellington, and tho defendant was tho Solicitor-General.

Mr C. P. Skerrett, K.C., with him Mr C. B. Morrison, appeared for the plaintiffs, and tho Solicitor-General, Mr J, W. Salmond, defended in person. The statement of agreed facts set out that Dalgety and Co., in November, 1909, entered into an agreement with certain of Lloyds underwriters with respect to the insurance of motor-cars against fire, theft, and accidental damage. According to the recognised \isago of Lloyds underwriters, on which basis the i contract was made, the contract of insurance contemplated that the underwriters should issue an open policy in favour of the plaintiff cqmpany (a) describing tho subject of the insurance in general terms, and leaving the particular property to bo covered from timo to time to be defined by subsequent declaration; (b) containing a provision authorising the plaintiff to issuo certificates agreeing that such certificates should represent the declaration on the original policy. _ and conveying all the rights of the original holder of the policy. In practice, however, no such open policy was actually issued by the underwriters to the plaintiff company, but there was a contract embodying the terms of the policy. In pursuance of this agreement tho plaintiff company had established a share of its business in New Zealand and had also declared its own properties under the provisions of the insurance contract. The insurance so constituted took effect as from the date of the issuo of the certificate of insurance and before any communications was made to Lloyds underwriters. the plaintiff company paid a portion of tho premium received to the underwriters and retained the residue. At regular intervals the company transmitted to the representatives of the underwriters- in London copies of all proposals and certificates received and issued. All claims under the insurance effected were settled by the company, and reimbursed by the underwriters! Jt was contended by the SolicitorGeneral that tho underwriters were carrying on the biisiness of insurance in .New Zealand through the plaintiff company as their agents, and that a deposit of £10,000 should therefore bo made by the underwriters, in accordance with the Foreign Insurance Companies -Deposit Act, 1908. No such deposit had been made. In tho alternative it was contended that the business of insurance was carried on in New Zealand by the plaintiff company, and they should, therefore, pay tho deposit. The n'.aintiff company contended ih.it any such deposit was unnecessary, <mi the ground that neither the plaintiff company nor the underwriters were carrying on the business of insurance in Aew Zealand. Mr Justice Sim reserved his decision.