Inquiry into insurance firm

Press, 11 August 1979, Page 22

Inquiry into insurance firm

PA Auckland A Hong Kong branch of a British insurance company, Commodore General Insurance. Ltd, is being investigated by the Justice Department and the police. The investigation involves more than $51,000 in premiums and the compulsory $500,000 bond with the Public Trustee required under the Insurance , Companies’’ Deposits Act Amendment, 1974. This bond is requied for the company to trade legally in New Zealand. Insurance industry sources fear losses of up to $300,000 to policy holders. Commodore General began trading in New Zealand through a local broker, R. Tether (Insurances), Ltd, about three years ago. The company issued written authority to Tether to act on its bhealf and accepted premiums of $51,500 in cash, less brokerage. Tether is believed to have written several million dollars worth of insurance on aircraft and fishing boats, including two big trawlefs which were insured for $1 million each.Tt is the validity of this insurance which is in doubt.

Tether’s, managing director (Mr R. Tether) said that he had a written agreement with Commodore Insurance and provided the company with a schedule of business his firm had written. He said the company had acknowledged premiums remitted to its bank. National Westminster, in London. Mr Tether said he cancelled his agreement with Commodore Insurance in March after a series of apparent irregularities over claims and premiums were discovered. “Steps have been taken tj protect clients in New Zealand against any contingent liabilities,” said Mr Tether. "Protection has been arranged under an umbrella agreement for unexpired policies.” This does not apply to policies on which claims have already been nyide. Mr Tether has sent a solicitor to London to make further investigations about the company.

Mr Tether said funds will be withheld from Commodore Insurance to settle genuine claims. He said he had not yet been 'able to evaluate the total value of claims.