HUGE INSURANCE

Taranaki Daily News, 7 April 1931, Page 7

HUGE INSURANCE

RISKS ON CUNARDERS.

TOTAL REACHES £9,000,000.

The British Board of Trade and the Canard Steam Ship Company have agreed upon terms by which the British Government will insure such proportion of the risk on two new giant liners wliich the company proposes to build as cannot be placed in the open maiket. Hie whole amount of insurance required for each of the vessels will be about £4,500,000. , . Doubt whether the normal insurance market would be able to absorb tlie whole amount of the insurance required is the reason for the agreement, says the Daily Telegraph. The Government —if Parliament approves a financial resolution to be mov--ed—would provide insurance again both the risk of construction and the full marine risk, but the Cunard Company would be required to exhaust the open market before calling upon the Board of Trade to make up any deficiency. A white paper issued by the Board of Trade recently explains the agreement, which has been reached ~n-fter consultation with representatives of the insurance! market.

So far as the full marine risk is concerned, the Board of Trade is to provide insurance at reasonable rates of premium; that is, rates similar to those fixed with reference to market rates for similar risks, but subject to an additional 2| per cent, on the rate fixed. For the building risk the rate is fixed at ij per cent, for three years, plus an additional 2J per cent., with a provision for extending ' the risk beyond three years at an additional premium of (id. per cent, per month. The Board of Trade expresses the hope that the market will be able to take a large part of, if not all, the risks. The liability of the State will depend on the extent to which the market is unable to take up the full insurance. For the purpose of carrying out the agreement, it is proposed to establish a Cunard insurance fund. So far as the fund may be unable to meet any claims, they will be paid to the extent of the deficiency from the Consolidated Fund. Arrangements for building the first of the new liners on the Clyde have been made. The extension of the Government insurance agreement to the second vessel is made conditional on the board being satisfied that her keel will be laid within six years of the execution of the agreement.