INSURANCES.

Lyttelton Times, Volume CXV, Issue 16606, 18 July 1914, Page 4

INSURANCES.

MORTGAGES AND MORTGAGEES. THE SELECTION OF OFFICES. During the discussion in Parliament on the State Insurance Department's report, Mr W. H. D. Bell stated that it was usual for mortgagees to dictate to mortgagors as to where their securities should be insured, and he did not corsider it proper for the State Office to adopt such a practice. Inquiries were made by a reporter yesterday on the subject, and a geial.'iran with consideiao.o experiece in financing city properties said that while on the ordinary 'ire insuranco the mortgagee did not dicti;e to the mortgagor, ho exerted a i-oiisiJciiib'o power of persuasion. In nianv cases ho advised the mortgagor to go to a particular office, and more often than not the advice was taken. So lai as indemnity insurance was concerned tho power was even greater IsuaJly the mortgagee selected the orlic'J, effected the insurance and informed the mortgagor of the office to which the prjemium had to be paid. There was no absolute dictation, but there couW be no doubt that mortgagees wero ablo more frequently than not to divert insurances into particular offices. . Among people who have entered into property mortgages this view is oorne out. 'the mortgagee who dealt with a mortgagor in ono case asked him to insure his property in a particular office, for which he was tho agent, and without demur the policy was taken out accordingly. A little later an account for the premium for indemnity insurance was received, and tho mortgagor found that he had tho privilege of paying the premium without having had the trouble of discussing tho merits of respective insurance offices. Tho mortgagee has to bo satisfied with tho office from which the policy is taken, and it is contended that in this respect, at any rate, tho private mortgageo has tho power to say where tho security will be insured. With this power admitted to be. in tho hands of the private enterprise firms, it was argued by more than one man that as the State, through the Advances Department, was dealing in cheap money, it should have the privilege of definitely exercising the power to give the insurance to the State Department, to reap a benefit for its generosity without inflicting any hardships on the mortgagor.