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QBE seeks to saddle former manager with $1.5 mln liability in failed Herbert Insurance

Monday 12th December 2011 2 Comments

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QBE Insurance (International), Australia’s biggest general insurer and reinsurance group, wants to saddle a former manager with a $1.5 million bill it says will emerge from him underwriting business to the now-failed Herbert Insurance.

The insurer claims former general manager of corporate and specialist risks Craig Anderson breached his employment agreement by committing QBE to an extended warranty and consumer protection insurance facility offered by Motorplus NZ without authority to do so, according to an Employment Relations Authority determination.

It says he didn’t take all reasonable steps expected to ensure QBE received premium payments from broker Herbert Insurance over the policy, and tried to cover up the agreement by deleting emails and not handing over the file for the transaction.

The dispute stems from the failure of Herbert Insurance, which has been under investigation by the Serious Fraud Office since April after receiving complaints of a shortfall in its insurance broking client account. Receivers Michael Stiassny and Brendon Gibson of KordaMentha said the company had questionable books in their first report.

Herbert Insurance received finance from Herbert Securities, which lists Paul Webb, former star of reality TV show Dragon’s Den, and Ellis Gould Lawyers partner John Radley as sole shareholders. They replaced Herbert Insurance principal Grant Herbert in September 2007, according to Companies Office documents.

Anderson rejected the claim, saying his agreement with Grant Herbert, the principal of Herbert Insurance, was to “offer only mechanical breakdown insurance on a ‘prior submit and sign off’ basis.”

“Anderson denies that QBE was ‘on risk’ to underwrite the policy and says that no premiums were paid and no ‘closings’ were provided by Herbert Insurance in Motorplus,” ERA member Rosemary Monaghan said in her determination.

Both QBE and Anderson sought to have the dispute removed to the Employment Court, which was granted by Monaghan.

Anderson, who left QBE in March to head up specialist underwriter Dual New Zealand, has lodged a counterclaim over the insurer’s alleged failure to transfer ownership of shares held on his behalf in an employee share plan.

Dual International, the biggest underwriting unit of Britain’s Hyperion Insurance, poached three of QBE’s corporate and specialist risk division executives, including Anderson, to set up the local branch.

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Comments from our readers

On 13 December 2011 at 12:14 pm caron cato said:
Clearly, this is a serious allegation which involves an even more serious allegation of deceit while at the helm of special risks cover at QBE. In the event the alleged intent and cover up by Mr Anderson is proven, surely that would be of interest to the Serious Fraud office. Of course if this is proven it must also place a question mark over his current role with even greater responsibility and fiduciary obligations.
On 14 December 2011 at 8:06 am Gracie Suwan said:
It would be reasonable to assume that this is the tip of the iceberg. How will Dual deal with such allegations I wonder?
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