Tower retains right to sell policies to ANZ National clients

Friday 13th March 2009

Tower has retained the right to sell insurance to customers of ANZ National Bank and ING (NZ) after the lender sought a court ruling to prevent policies being renewed while it lined up a rival underwriter, Vero Insurance.

The High Court rejected a claim from ANZ and ING, according to a statement from Tower managing director Rob Flannagan. Tower was entitled to renew policies with the bank's customers even after the firm's policy agreement had ended, he said, citing a ruling from Justice Wylie.

The judgment said the bank's customers became Tower's clients as well when they were sold Tower policies. It was "somewhat arrogant for the bank to now try to interfere with that contractual relationship simply because it allowed the policies to be sold with its brands on them," according to the statement.

At stake is ownership of some 196,000 policies, held by 110,000 policyholders.

ANZ National also sought orders requiring Tower to hand over policy information to the bank so it could pass the details to Vero. Justice Wylie ruled that ANZ National was entitled to receive the information but Tower couldn't hand it over with the consent of the customers. ANZ National was prohibited from handing the data to Vero, the statement said.

A hearing has yet to be fixed for a counterclaim from Tower.
Shares of Tower fell 3% to $1.30 and are down 12% this year.

By Jonathan Underhill

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