The report entitled Cheyenne Insurance Company (NZ) Ltd: When is an ‘insurance’ company a real insurance company? was published on this website on 20 October, 2010. Just seven days later the company’s director and owner, John Malcolm Carr, a San Antonio Texas-based CPA, changed the so-called ‘insurance’ company’s name on the NZ Companies on-line register, one it had had since 9 August 1994, to a new name Cheyenne INVESTMENT Company (NZ) Ltd [Emphasis added].
Why did this US businessman need to make this change on 27 October 2010 after calling it an INSURANCE company since 1994. The answer relates to the passing by parliament on 7 September 2010 of the Insurance (Prudential Supervision) Act 2010 (see 20 October report) outlawing the use of the word “insurance” in a company name, when the company does not have authorisation to engage in insurance transactions.
See: US-based critic of economy [John M Carr CPA] has lots more to say
The NZ public and Society (SPCS) members expect the Society, which seeks as one of its objectives “to foster public awarenes of the benefits to social, economic and moral welfare, of community standards, and to encourage constructive debate and discussion in this area”; to be a ‘watchdog’ on matters that impact the maintenance of the public good. The Insurance Council of New Zealand has raised concerns regarding companies being registered in New Zealand by overseas persons, such as those with joint US-NZ citizenship, who then only offer insurance products overseas (e.g. US).
The main concern is that since the companies are not offerng insurance products in NZ, the companies are not subject to NZ insurance legislation, despite the fact they (1) use the word “insurance” (or similar word) in the company name and (2) are representing (expressly or implied) that they are governed by New Zealand Insurance legislation, because they are registered under the Companies Act 1993.
By engaging in these activities (1 & 2), company directors living overseas actively avoid any regulatory oversight by NZ authorities by exploiting a loophole in our laws.
A number of countries have expressed concerns over these NZ registered ‘insurance’ companies that seek to get around compliance and regulatory supervision in overseas jurisdictions, by pointing overseas regulators to the fact that they are registered in NZ as “insurance” companies.
Cheyenne Insurance Company (NZ) Ltd, privately owned by John M Carr, like these companies noted above, never lodged a deposit with the Public Trustee in New Zealand, had no rating and was never lawfully entitled to engage in insurance transactions in NZ.
As noted in our earlier report, John M Carr’s company has in fact always been operating in NZ as a property development and investment company under his directorship, despite its previous name as an “insurance company”. Cheyenne Insurance Company (NZ) Limited has now transformed into Cheyenne Investment Company (NZ) Ltd.
What’s in a name anyway?
NZ Companies Office wensite: www.companies.govt.nz
Cheyenne Insurance Company (NZ) Ltd: When is an ‘insurance’ company a real insurance company?
By SPCS | Published: October 20, 2010
“…. On 7 September 2010 the Insurance (Prudential Supervision) Act 2010 was approved by the NZ Parliament and received the Royal Assent. It embodies a wide range of legislative reforms that are well overdue and are overwhelmingly supported by industry members. Under s. 219 and 220 of the Act it is an offence for a company to use in its name any of the following words, unless the company is legitimately engaged in lawful insurance transactions, those words being “insurance”, “assurance”, “underwriter”, and “reinsurance” or words with identical meanings…”
John M Carr – Cheyenne Insurance Co. (NZ) Ltd $5.5 M property bonanza
By SPCS | Published: February 17, 2010