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The New Zealand insurance industry has pulled the plug on directors' insurance for y2k-related law suits. This indicates that the insurance industry knows what's coming, and it how decided to forego two years of premiums.
A spokesman likened y2k to a burning building. You can't buy insurance once it's burning.
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The Insurance Council of New Zealand yesterday announced that businesses and homes that did not make provision for the year 2000 computer problem would not necessarily be covered by insurance.
The main people at threat are directors and executives of listed companies, who could be sued for negligence for not preventing the problem. Many companies have taken out insurance to protect directors and executives from actions for damages.
This cover is now invalidated when the year 2000 problem is the cause.
The year 2000 bug, or Y2K as the acronym-happy computer world has dubbed it, join war and atomic fusion as calamities not covered by most insurance policies. . . .
"We're saying you cannot insure a burning building," Mr Sargeant said.
He described the millennium bug as the biggest issue facing world insurance. The removal of cover was international. . . .
The Commerce Commission stepped into the year 2000 fray yesterday. The chairman, Alan Bollard, said any attempt to co-ordinate a response in the industry could risk breaching the Commerce Act.
However, if companies had acted independently and the council was reporting what had happened, there was likely to be no concern.
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