LIABILITY OF POLICYHOLDERS

Dominion, Volume 32, Issue 259, 31 July 1939, Page 13

LIABILITY OF POLICYHOLDERS

Public Mutual Insurance Company

STATEMENT BY THE LIQUIDATOR

Commenting on the resolution adopted on July 14 by a number of Wellington policy-holders of the Public Mutual Insurance Company of New Zealand, the liquidator of the company, Mr. J. W. Hyland, stated that a misleading impression was liable to be created among the general body of pol-icy-holders. He said the resolution was not consistent with the decision made unanimously at a meeting of the policyholders’ advisory committee held in Auckland at the end of April, and fully attended by members representing pol-icy-holders throughout the Dominion. At that meeting the following resolution was adopted:— “That this advisory committee, appointed by the members of the various policy-holders’ associations throughout the Dominion, after consideration of the legal opinions obtained and upon receiving the full report from the liquidator, recommends the policy-holders’ committees to take immediate steps to induce members to make payments of the levies requested 'by the liquidator in order to facilitate the winding-up of the company.” It would be seen, said Mr. Hyland, that after due consideration the advisory committee recommended that pol-icy-holders should make immediate payment, and in no way restricted the proportion which they should pay. It would have been difficult for the committee to advise any other course, because at the present stage of the wind-ing-up it was impossible to take into reckoning such'items as bad debts, contingent claims under policies, taxation, disputes under contracts, interest payable by the company and the full expenses of winding-up. If policy-holders acted as suggested in the resolution adopted at the meeting in Wellington, he considered it would be inimical to their interests, ( as early payment of levies would reduce the amount of the ultimate liabilities, and if it was found that too much had been paid the interests of policy-hold-ers among themselves would be adjusted and any surplus would be refunded.

He did not wish the policy-holders to continue further resistance to the payment of their levies, as it had been decided that they were legally liable, nor at this stage of the liquidation did he wish them to believe that they were not liable for the full amount of the levy, as that was imposed by the directors before winding-up, and he had no power to accept any lesser sum by way of settlement and was compelled to insist upon payment in the interests of all concerned.