Gold Star in difficulties

Press, Volume CXI, Issue 32701, 2 September 1971, Page 3

Gold Star in difficulties

(New Zealand Press Association) .WELLINGTON, September 1. The Gold Star Insurance Company, the taxi industry’s own insurance company, was facing a financial crisis, and possible dissolution in January, the company’s chairman of directors (Mr H.' C. Lough) said today.

Addressing the annual meeting of the Taxi Proprietors’ Federation in Wellington, he said that by law the company needed $lOO,OOO in paid-up capital. The company was $26,715 short of that sum.

If the deficit was not eliminated by January 12 the company would be > forced out of business.

Mr Lough said there was a deficit of $32,261 in the company’s accounts. Costly claims, the need to cover the high percentage of unexpired risks, and the costs related to the take-over bid by Credit Services Investments, Ltd, in January, were cited as contributing factors. Mr Lough said Geld Star.

was more vulnerable than other motor vehicle insurance companies because it did not have large capital and diversification of risks. If the company closed the State Fire Office would have virtually a monopoly, he said. The difficulties could- be overcome only if the industry threw its weight behind the venture, said the president of the Taxi Proprietors’ Federation (Mr M. A. Warnes). If Gold Star folded,, the industry would be set back. “In a short time we would find substantial increases in the premiums of outside companies, and reports of instances where taxi proprietors could not get any insurance cover,” said Mr Wames.