Own insurance company for vehicle dealers

Press, 14 June 1980, Page 19

Own insurance company for vehicle dealers

A proposed new company, Motor Industry Insurances, Ltd, to be formed by a number of Auckland motor vehicle dealers, is asking the 2500 New Zealand motor vehicle dealers to subscribe for shares.

The purpose is to return to the dealers the profits from the business now given to the existing insurance companies, as well as the commissions.

According to the prospectus, new and used dealer-to-public car sales for the 12 months to October, 1979, totalled 228,102. Based on a conservative annual premium of $l5O a car insurance arranged by dealers and their salesmen would generate more than $500,000 a week in premium income.

Dealers are being asked to subscribe for at least a thousand 100 c shares. If enough support is evident the company will be incorporated. Authorised capital is $2,500,000. Based on a number of assumptions — inter alia that 1300 dealers -support the

new company — the profit, projection on a capital of SII million is about $300,000. The prospectus also says that the company will provide immediate comprehensive insurance for car purchasers and immediate optional cover in the event of accident, sickness or death preventing a purchaser meeting finance payments. A policy will be offered with options for cover on default of finance agree-' ments, warranty claims, firei burglary and theft. Licensed motor • vehicle; dealers, salesmen and their' families will be able to get) cover for their houses and other personal insurance needs. Commissions will be cr.d-

, ited to their dealers or : employees. The law requires an insurance company to have at least $600,1)00 before it can start business. The prospectus makes it clear the company will not begin operating unless shares are ■ subscribed for now. No allotment will he made unless at the closing date for subscriptions, September 130, applications have been [received for a total of (750,000 shares. If •no allot(ment has been made application money will be refunded. :i The directors are Messrs R. McDonald, R. B. Stanley. i B. A. Smith (all Auckland [dealers) and K. P. Murphy ■ I (solicitor).