Tower turns guns on Vero in bank row

Photo: Michael Bradley

Tower has taken on ANZ National and Vero.

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Tower's insurance arm has upped the ante in an extraordinary and bitter legal battle over the rights to sell insurance to ANZ National Bank's customers.

At stake is a chunk of insurance premiums worth $70 million a year – a third of Tower's general premium income – and the forthcoming court hearing promises to consider whether certain competitive practices are "deceptive and reprehensible" or simply "the normal course of business".

Tower is seeking an injunction to stop rival Vero from selling ANZ and National Bank-branded policies after the bank ditched Tower as its insurance supplier in August 2008 in favour of Vero.

Disclosures by Vero's owner, Suncorp, reveal Tower alleges Vero received and used confidential information, and it wants an injunction "restraining Vero Insurance New Zealand Limited from selling ANZ and National Bank-branded policies of insurance".

The remarkable legal saga has the giant Australian bank fighting for control of its brand as Tower asserts rights to continue selling insurance to ANZ National customers.

Tower's latest legal action follows a partial victory in the high court in March allowing it to provide and renew ANZ National-branded insurance to some 110,000 customers with 196,000 insurance policies, despite the bank's opposition.

But the court said the bank could promote Vero to its customers, creating a tug-of-war over policyholders paying some $70m in premiums every year.

The court also banned the bank from passing the Tower customers' details on to Vero, saying the information belonged to Tower.

That decision is now being appealed, but Tower has filed another claim alleging ANZ National passed confidential information to Vero and that "Vero has used that information for the purpose of purchasing or acquiring from either or both ANZ and INGNZ rights to exploit the portfolio of insurance policies sold by Tower".

In a recent discovery hearing, Justice Wylie noted: "Tower says that it is asserting that Vero has built up a system, using confidential Tower information, and that equity should stop Vero from using it."

The bank contends, meanwhile, that the information was publicly available.

Its lawyers indicated that in contesting Tower's claims, they would seek to lift the lid on insurance industry competition tactics, and show "that the extent to which Tower undertakes this activity is relevant in disputing Tower's contention that such activities are deceptive and reprehensible, as opposed to legitimate conduct carried out in the normal course of business".

Further to that, Tower agreed to hand over documents relating to an "attack on State", an insurance company owned by IAG New Zealand, which it appears Tower targeted with a view to poaching its customers.

The case is likely to be heard next year.

- © Fairfax NZ News