INSURANCE RISKS.

Hokitika Guardian, 13 March 1924, Page 4

INSURANCE RISKS.

POSITION' OF UNDEBUnUTEItS. ax important judgment. The opinion of the Chief Justice (Sir Robert Stout) in regard to their position under the Insurance Companies ,V. i. 1021-22, in connection with the lo,lenient of deposits with the Public Tiustoo as security to those insured, van recently sought by G. H. Scales Ltd., who proceeded at Wellington by way’ of originating summons against tie Public Trustee, and the AttorneyGeneral. On Tour.sday last the Chief Justice delivered his reserved judgment ot: the point raised in the summons. In reviewing the facts of the case, his lienor said that there was what was ca 1!,.,! in f.ondon a body known as Lloyd's. They were underwriters: it ’• us not a company, neither corporate noi unineorporate. They had a meeting place in Ismdon, and they received applications for insurance, hut there w a- no company or association liable fnr the insurance. Those who insured, insured with individuals, hut no individual was allowed to lie in Lloyd s. or tv, he called nil underwriter of Lloyd’s unless he complied with certain requirement*. such .as the deposit of money at Lloyd's, etc. “In this case.” said iiis Honor, “certain undierwriters in Lloyd's issued a policy of what is called an agreement-contract. This agree-ment-contract stated ‘direct damage by earthquake and lire caused directly or indirectly therefrom in New Zealand ami Tasmania.’ It then lifts signatures Pi it by a large number of underwriters, and each underwriter takes a share ithe risk, some 1-03 of the risk and simr' 2-08 of the risk, some 1-20. some 1 12, some 1-8. some 1-7. and so onvarious risks, and the quotas mentioned a,e opposite certain amounts which quotas arc limited. For example, the fp-st name is Arthur Burns, and his quota is 1-68 of £1:5.000. Then there is a Mr Heath, who lias 1 of 0171)0, and so there me varying rates and various amounts. The total amount is AMO,OOO. and the risk is to commence between the first day of Septemher. 1022. and the 31 st. day of August. 1023. both da vs inclusive. The claims are to he pliavahle in London and the limit ot (lie risk is £IO.OOO in any one block, ami £IO.OOO in any one conflagration area. The signatories to the agree-ment-contract. as it is (idled, are individuals except till 1 last, which has these words: ‘£4loo for and on heliulf of the Excess Insurance Company, Limited K. |.(. Blow, underwriter.' That seems to be a company. The question, however, is not raised about this Excess Insurance Company, as the plaintiff admits that the Excess Insurance Company would have to comply with the reouiroments of the Statute. The question is. arc the individual underwriters each a. company, or is there any association amongst them making the " hole of them a company within the meaning of the Act'-”

His Honor said that he tailed to see any evidence of any association between the various parties. Each signed separately. It was true that they were all engaged in insurance, hut they were encaged hy different people at ditierent times, and it- might be tor different buildings, different goods and different areas. After referring to a number of cases quoted during the trial. the Chief Justice .said that he was of t.te opinion that there was no evidence tint! the underwriters of Lloyd’s were Mil association of persons. His Honor further stated that he was of the opinion that the business was not strictly speaking a lire insurance business. It was an earthquake business. It was a. distinct class of insurance business. His Honor made the following declaration:-- (1! There was no carrying on by Lloyd’s or the Lloyd’s underwriters a.i a company or association of any , lass or classes of insurance within the meaning of the Insurance Companies Deposits Act, 1921. (2) Lloyd's or Lloyd’s underwriters "ere not a company within the meaning of the Act. (Jl They wore not liable to Deposit money under the Statute. At the healing, Mr C'. !’. Skerrett, K.C.. with him Mr It. lieere. appeared lor the company, Mr C. G. Rose for Hie Public Trustee, and Mr A. Lair for the Attorney-General.