Court of Appeal reserves decision on Tower ANZ battle
The Court of Appeal has reserved its decision on the legal battle between ANZ National and Tower Insurance over $70 million of premium income.
Thursday, April 1st 2010, 1:39PM
The battle is for insurance ownership of 110,000 customers representing 196,000 general insurance policies.
Tower provided fire and general insurance products to the ANZ and National Bank of New Zealand for 15 years and this allowed Tower to benefit from the ANZ National Bank brands and to access to its 1.2 million customers.
The benefit ANZ National Bank had from the arrangement was the ability to offer a one-stop insurance service as well as a commission for each policy sold with a share in Tower's profits.
But in 2005 ANZ National decided to take on Vero as its new general insurance products underwriter and the agreement with Tower was terminated.
ANZ National Bank claims Tower could continue to administer the existing policies until they came up for the annual renewal, but could not renew them.
However, Tower has refused to give up control of the customers signed up under the old agreement which make up about a third of its premium income.
Tower has continued to renew policies as they fall due using the bank's insurance brands, ANZ Cover and National Bank Master Cover.
In March last year the High Court ruled in Tower's favour, saying that when Tower sold a policy to a bank customer, the customer also became a Tower customer.
BusinessDay reported that much of the argument was around how key clauses in the agreement should be interpreted.
Court of Appeal president Sir William Young repeatedly criticised the standard of the wording in the documents and said "it is possibly a waste of time to try and make sense of the agreement".
Justice Susan Glazebrook said the agreement's failure to spell out explicitly how existing policies were to be dealt with on renewal after the alliance ended meant the court was not going to find "a smoking gun" to indicate which side was in the right.
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