INSURANCE DEPOSITS.

New Zealand Herald, Volume LXIV, Issue 19691, 18 July 1927, Page 12

INSURANCE DEPOSITS.

Sir, —During the recent discussion in the House of Representatives, the Hon. W. Nosworthy is reported to have said that "no company in the world could compete with Lloyd's if the latter wished to get the business." I should like to point out that Lloyd's has been in existence as long as, if not longer than, the majority of ir.swance companies. Insurance companies as a whole have always had Lloyd's competition with them, yet wherever all things have been equal the insurance companies have more than held their own. In the case of New Zealand the position is unique, inasmuch as the British insurance companies deposit a large sum of money in cash with the Government, although the invested funds of those companies, running into millions, are published in the form of annual balance-sheets for the inspection of the public, while Lloyd's neither put up the deposit in cash nor publish a balancesheet. The average New Zealand insurer is doubly protected as far as the insurance companies are concerned. Mr. Nosworthy remarked that Lloyd's were exempt from the cash deposits in New Zealand because they were not a company, but an association, but surely it is obvious to the average insurer that this would make it much more essential that a deposit shovld be put up by every underwriter whose name appeared on a policy to comply with the Act. As ar. alternative, why not be consistent and repeal the Insurance Companies' Deposits Act t Mr. Sullivan, the member for Avon, stated that the whole of the Stat* fire reinsurances were held hy Lloyd s If that is so, then the State Fire Office is not getting a square deal, for morally it is against all British traditions for any insurance company or individuals in any way to compete for business direct that is 'held by them by way of reinsurance from others With regard to Mr. Nosworthy's remarks that the insurance companies' doing business here had a very good run, it is a well-known fact that the loss ratio in New Zealand per capita of population is one of the worst in the world, and taking the past two or three years, it is doubtful whether any insurance company operating in New Zealand has paid any income tax here during that period, inasmuch as the l2Jt per cent, bonus allowed to the public has turned any possible profit into a loss. Yet all companies are loyally carrying on and making provision for a possible calamity, such as befel San Francisco some years ago. There is no reason why Lloyd's should not be among us as in other parts of the world, but it is to be hoped that the Government will give an equal opportunity for all, and not exempt one body alone from making cash deposits for the security of policy holders. Fair Play. July 15, 1927.