STATE FIRE INSURANCE

Hokitika Guardian, 16 August 1929, Page 3

STATE FIRE INSURANCE

DEPARTMENT’S METHODS DEFENDED.

WELLINGTON, Aug. 14

• In the-bOurse of ail interview to-day, the- Hon Sir Apdrana Ngata* Minister ih charge of the State. Fire Insurance Office; dealt willi certain remarks arid allegations emanating from Wellington' and'; recently .published in several newspapers, regarding the State Fire Office 1 . -

t One statement made was that tlie Prime. Minister (tlie Rt. ITori Sir Joseph Ward) dobs not appear to sympathise'with any further growth of tlie office at the v experisb of the companieis. fti reply to- this, Sir Apir'ana Ngata said- that the' Prime Minister had authorised Him to say that lie had' made no sticK- statement.

Other allegations dealt with by the Minister were that the development bf the State Fire Office bonus rebate was a mistaken way bf conducting business ; that the Strife Office operates with 1 unfair advantages such as obtaining- the cream - of the State Advarices and Ptiblic Trust business, enabling it to quote unduly low rates; that the figures which show the year’s operations by the State Office are not correctly compiled, arid that if proper allowances were made it would be found that the office was not making anything like the profits that it shows. The Minister that bonuses out of profits of persons insured with the office were provided for in the. original State Fire Insurance Act bf ijo3. The mutual principle of the' legislation remains in. operation to-day as a popular feature of the Act. Since 1923- policy-holders of the office have benefited by rebates to the extent bf £127,000 and the general public lias also substantially benefited by similkr rebates, given by the private insurance companies;

: Sir Apirana also said that it was a usual' practice for mortgagees to requirel iriortgagors to insure with such '•insurance offices as they nominate, and this practice, which 1 is considered legitimate, precludes: the State Office from obtaining' much business that would otherwise corne to it. However, : neither the mortgagors of the Strife ' ixuvances Office nor bf the-Public Trust Office are compelled to insure with the State Office. Only in the case of .State Advances mortgagors is a preference expressed, without, however, any compulsion.

“The allegation in regard to the annual ffgures,” the Minister said “is ■as uriscrupulbus as it 1 is- without’ foundation, and is effectively answered' bv the fact that the State Office annual: ‘accounts are drawn up on coriimercial lines as laid down, by the Act, and'are ’certified l as 1 correct by the Controller iand Auditor-General;”

The Minister further stated that he was satisfied that the attitude of the State Office was' not such as to drive well-managed offices out of bufiii ness. “The department pays all expenses' out of revenue, and* in future hand as well' as income-tax; and its strong financial 1 position", built’ up on a-'borrowed capital of' £2OOO, long since

repaid: with interest, arid’ its ability/ to ! gran* bonus rebates, may be' fairly ascribed' to its record of' excellent service to the public, coupled with' careful underwriting arid' low working costs,’’ he said. Sir A'pirana* said that’ he was pleased to note that the executive of the Fire’ Underwriters’ Association dissociated'itself from wHat must be:characterised as' an unfair attack on this- useful and' popular Department.