Website interest.co.nz claims a director of failed Queenstown insurer Western Pacific Insurance, Jeff McNally, was blacklisted in Australia.
The business website alleges the Australian Securities & Investment Commission refused to renew McNally’s licence in 2002 for acting in a “false and misleading manner in dealing with clients”.
Among other things, his company, Allied Asia, was accused of hiking premiums and pocketing the difference without the knowledge of underwriters and clients.
Months later, McNally started up Western Pacific Insurance in Queenstown with his brother-in-law, prominent local businessman Graham Smolenski.
Interest.co.nz reports Smolenski saying that McNally wasn’t banned from the insurance industry in Australia, despite ASIC’s refusal to relicense him.
Smolenski also alleged that the whole basis of the case against McNally was found to be incorrect.
Smolenski and McNally put their company into liquidation on Monday.
McNally earlier told Herald on Sunday newspaper that Western Pacific Insurance had been “swamped” by claims from Christchurch’s February 22 earthquake.
Interest.co.nz managing editor Bernard Hickey today told Radio Live: “This is a classic case of when the tide goes out, you find out who’s swimming naked.
“We’ve seen it with the property developers in Queenstown, leaving finance companies naked.
“Now with the earthquake in Christchurch, we’re finding insurers and insurance brokers who haven’t been completely upfront or haven’t put aside enough money for such a disaster.”
According to Radio Live host Andrew Patterson, the Insurance Council has revealed that Western Pacific Insurance was twice declined membership of its governing body.