INSURANCE COMPANIES

Wanganui Chronicle, Volume 84, Issue 178, 31 July 1940, Page 6

INSURANCE COMPANIES

BILL BEFORE PARLIAMENT REQUIREMENTS OF NEW PROVISIONS [ Ter Press Association.] WELLINGTON, 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 insurance companies operating in New Zealand as security against liabilities.

There is a section dealing with local companies, which are defined as companies established, incorporated or having their head office in New Zealand, but do not include the mutual fire insurance associations incorporated under the Mutual Fire Insurance Act. Local companies commencing business are required first to deposit the following sums with the Public Trustee: For fire insurance business, £22,500; for employers’ liability insurance, business, £22,500; for other classes ot insurance business except under the Motor Vehicles Insurance (Third Party Risks) Act, £5OOO. Local companies already in operation are required to deposit £lOOO together with £lOOO for each complete £2500 of premium income during the last financial year in respect of each specified class of business, until the stipulated deposit is reached. A further section which deals with motor vehicles (third party risks) business defines a company as any association of persons, whether corporate or incorporate, and includes agents of British and foreign underwriters and every person who in New Zealand acts as an underwriter. All companies commencing third-party risks business are required first to deposit £10,000.-. Where they are already operating, however, they will have to deposit £lOOO together with a further £lOOO for each complete £2500 of premium income from this class of business until the sum of £lO,OOO is reached. Companies already in business may, instead of depositing the whole of the required amount in money, deposit not less than one-fifth in money and the balance in securities. In the section, dealing with the winding up of companies, power is given to tlh Minister of Justice to petition for the winding up of an insurance company on the ground that it is unable to pay its debts. The Minister may serve notice on the company requiring it to supply him with any information he requires tu determine whether it is insolvent.