Instability Alleged In Aust. Car Insurance

Press, Volume CX, Issue 32351, 17 July 1970, Page 4

Instability Alleged In Aust. Car Insurance

<N ZP A Staff Correspondent) i SYDNEY, July 15. | Many Australians are taking a closer look at their car insurance because of unsettling reports about the financial position of some insurance companies. Last week, Mr R. J. Lamble general manager of the N.R.M.A. Insurance Company, alleged that a significant number of insurance companies in Australia were unstable. The N.R.M.A. is the New South Wales equivalent of the New Zealand Automobile Association.

Mr Lamble’s statement was corroborated by . the secretaries of two insurance associations, and the Victorian Automobile Chamber of Commerce declared that “a small number” of motor vehicle insurance firms were in financial difficulties.

Mr Lamble would not amplify. his remark about the instability of some companies, or specify their number or the fields in which they operated-

“All I can say is that overseas experience is that these companies are predominantly in the motor vehicle insurance field.”

In Britain last week, another insurance company was wound up, taking to 14 the number of “bargain” insurance firms which have collapsed in the last 10 years. Motor insurance dominated the business of all 14. Mr C. C. Wrench, general secretary of the Fire and Accident Underwriters’ Association of New South Wales and Mr I. J. Frew, secretary of the Australian Insurance Association, agreed with Mr Lamble. Mr Wrench said that the public would be well advised to check on the status of companies before insuring with them: and Mr Frew suggested that a small number of the 200 insurance firms in Australia were unstable.

r The New South Wales Labour Opposition last week supported Mr Lamble’s call for an increase from $20,000 to $500,000 in the deposit which an insurance company must lodge to begin business. It also sought a Government inquiry into motor vehicle insurance. The state Minister of Transport (Mr Morris) said that an inquiry was already under way, and promised to expedite it. “One or two motor insurance companies

need a close investigation,” he said, adding: “Something has to be done about fly-by-night companies in the car insurance business.”

One car-repairer said that he had waited six months to be paid for work done on cars insured by one company. Angry claimants still had not been satisfied at 5 p.m. after an al!-day vigil in the company’s office, and were told to come back again to have their claims settled. Meanwhile, the Victorian Automobile Chamber of Commerce has advised panelbeating and repair companies to refuse to release repaired cars covered by six insurance companies until the work is paid for. • The vice-president of the chamber (Mr A. Kelly) has suggested that they demand payment for the work from motorists, and let the motorists try to extract the money from the insurance firms.