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NAGICO to stop insuring vehicles with French plates
by The Daily Herald
Posted: Oct 14, 2005 15:11 UTC
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PHILIPSBURG - NAGICO Insurance Company will stop selling policies for vehicles with French number plates as of January 2006, unless the Dutch and French governments come to some form of arrangement to facilitate the continued sale, Managing Director Imran McSood announced Thursday.
However, the insurance company will continue to honour its obligations to existing policies, including those whose life runs beyond the January 2006 deadline, McSood told reporters at a press conference.
“We will continue to honour our policies until they naturally expire. But we will not renew any policy. We don’t want to be accused of operating illegally,” he said.
NAGICO’s decision has come on the heels of an announcement by the French Control Commission on Assurances CCAmip last week that NAGICO is not authorised to sell its policies on the French side.
McSood said insurance brokers had been informed via letter in August of NAGICO’s decision. Head of the Department of Economic Affairs Frank Mingo has been appointed by the Island Government to try to work out a resolution for this and similar difficulties being experienced by Dutch side-based businesses.
Although NAGICO is not authorised to operate on the French side, it continued to sell its policies to persons with French number plates when they requested coverage, McSood explained. He said the company had never had a physical office on the French side, although its policies were accessible via agents and brokers operating on the French side. None of these brokers have contracts with NAGICO.
He also said it would not be lucrative for the insurance company to open an office on the French side just to serve the market on the northern half of the island.
He speculated that NAGICO, which has been operating for some 25 years, is being targeted because it “is seen as a threat” to French insurance companies, has the largest number of French motor vehicle clients and has established a good track record over the years.
NAGICO stopped issuing policies for French clients some years ago when a court ruling stipulated that it was not authorised to do so. The company began issuing policies again after numerous insurance companies started short-lived operations on the French side, many of which have since folded, and clients began turning to NAGICO for service.
McSood said NAGICO was also operating based on the 3½-century-old Treaty of Concordia. He said though that the Treaty would be weightless in a court of law and NAGICO does not want to be dragged to court.
“We have worked within the legal framework as a company on the Dutch side, but operated in the spirit of the open border system,” he told reporters. Using the banking industry which accepts French residents as clients as an example, he said companies in many other sectors were also operating in this fashion.
He accused French insurance companies of also selling their policies to Dutch residents.
Vehicles bearing French plates and insured by NAGICO were registered on the French side for many years without hindrance prior to CCAmip’s remarks, he noted, adding that this matter was becoming a trend that “breached” the spirit of cooperation between the French and Dutch sides.
“NAGICO did not see itself doing anything contrary in the spirit of the Treaty of Concordia that was established 350 years ago. This situation is serious and can have far-reaching consequences for NAGICO and other businesses. This is the beginning of what may be a difficult period in coming years.”
President of the St. Maarten Chamber of Commerce Ludwig Ouenniche, who shared the press conference with NAGICO officials, expressed hope that with Mingo’s appointment, this issue would be resolved within a short time. Ouenniche said many French companies had been doing business on the Dutch side without hurdles for years.
McSood said NAGICO’s premiums were “attractive,” “fair” and “reasonable,” and its service “superior” to those being offered on the French side. “People’s faith in NAGICO is there and they sought coverage and we provided it,” said McSood.
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