DEPOSITS REQUIRED

Grey River Argus, 31 July 1940, Page 8

DEPOSITS REQUIRED

FROM N.Z. INSURANCE COYS. Bill to Ensure Solvent business [Per Press Association] PARLIAMENT BLDGS., July 30. Authority for the compulsory winding up of insurance companies of doubtful solvency is provided in the Insurance Companies Bill, which was introduced and read a first time in the House to-night. The Bill also stipulates that substantial deposits must be made by the insurance companies operating in New Zealand against liabilities. Local insurance companies, when commencing business, are required, first, to deposit the following sums with the Public Trustee: For the fire insurance business, £22,500; for the employers’ liability insurance business, £22,500; for other classes of insurance business, except under the Motor Vehicles Insurance (third party risks) Act, £5,000. The local companies already in operation are required to deposit £l,OOO together with a further £l.OOO for each complete £2,500 of premium income, during the last financial year in respect of each specified class of business, until the stipulated deposit is reached. Under a further section, which deals with the Motor Vehicles (third party risks) business, all companies commencing the Third Party Risks business are required, first, to deposit £lO,OOO. Where they* are already 7 operating, however, they wifi have to deposit £lOOO, together with a further £lOOO for each complete £2,500 of premium income from this class of business, until the sum of £lO.OOO is reached. In the section dealing with the winding up of companies, power is given to the Minister of Justice to petition for the winding up of an insurance company on the ground that it is unable to pay its debts.