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Former owner and director of Herbert Insurance Group Limited (HIG), Grant Malcolm Herbert (61), has appeared in the Auckland District Court facing Crimes Act and Secret Commissions Act charges, following a Serious Fraud Office (SFO) investigation into the

SFO lays 28 charges relating to Herbert Insurance Group collapse

Former owner and director of Herbert Insurance Group Limited (HIG), Grant Malcolm Herbert (61), has appeared in the Auckland District Court facing Crimes Act and Secret Commissions Act charges, following a Serious Fraud Office (SFO) investigation into the failed insurance brokering company.

The SFO allege that between 2005 and March 2011, Herbert committed various offences including theft by a person in a special relationship, using a forged document in relation to obtaining a credit facility, and a number of offences in relation to corruptly giving an employee of a customer, secret commissions for referring insurance business to the Herbert Insurance Group.

The SFO alleges that Herbert failed to forward premiums received from clients to insurers, in some cases leaving the customers uninsured, and diverted this money to pay operating expenses for HIG and to fund his lifestyle. The SFO alleges this was contrary to statutory requirements imposed on insurance brokers or contrary to agency agreements with insurers.

They also allege that an insured customer was over-charged and the illicit profit was shared between Herbert and the employee of the customer.

When HIG was placed into receivership and liquidation, there was a shortfall of $3.1 million owed to insurers.

Some insured customers also found that the insurance they believed they had obtained had not in fact been underwritten by insurance companies.

SFO Chief Executive, Adam Feeley, says "In the current economic conditions, confidence in the insurance industry and good insurance cover in particular, is more important than ever before. It has been reassuring that the insurance companies for whom HIG acted as broker, and who in many instances knew nothing about the insurance cover placed with them, have supported customers, accepted the risk, and taken any financial loss themselves."

HIG was placed in receivership on 7 March 2011, following an attempt to voluntarily liquidate the company and sell assets. HIG had approximately 4000 clients throughout New Zealand. Receivers, Korda Mentha advised in March 2011 that they sold Herbert Insurance Group's client base to Aon New Zealand, one of the world's largest insurance brokers.

After receiving a complaint, the SFO opened its investigation into HIG on 10 March 2011.


For further information

Andrea Linton
Serious Fraud Office
027 705 4550

Note to editors

Background to investigation

Since March 1991 Grant Malcolm Herbert has ultimately been the sole owner and Director of the various Herbert Insurance Group (HIG) entities.

HIG acted as an insurance intermediary for insurers and also provided an insurance brokering service to insured clients.

HIG was placed into receivership on 7 March 2011.

Crimes Act offences

Section 220: Theft by person in special relationship
(1) This section applies to any person who has received or is in possession of, or has control over, any property on terms or in circumstances that the person knows require the person-
 (a) to account to any other person for the property, or for any proceeds arising from the property; or
 (b) to deal with the property, or any proceeds arising from the property, in accordance with the requirements of any other person.
(2) Every one to whom subsection (1) applies commits theft who intentionally fails to account to the other person as so required or intentionally deals with the property, or any proceeds of the property, otherwise than in accordance with those requirements.
(3) This section applies whether or not the person was required to deliver over the identical property received or in the person's possession or control.
(4) For the purposes of subsection (1), it is a question of law whether the circumstances required any person to account or to act in accordance with any requirements.

Section 257: Using forged documents
(1) Everyone is liable to imprisonment for a term not exceeding 10 years who, knowing a document to be forged, -
 (a) uses the document to obtain any property, privilege, service, pecuniary advantage, benefit, or valuable consideration; or
 (b) uses, deals with, or acts upon the document as if it were genuine; or
 (c) causes any other person to use, deal with, or act upon it as if it were genuine.

Secret Comminssions Act offences

Section 3: Gifts to agent without consent of principal an offence
(1) Every person is guilty of an offence who corruptly gives, or agrees or offers to give, to any agent any gift or other consideration as an inducement or reward for doing or forbearing to do, or for having done or forborne to do, any act in relation to the principal's affairs or business (whether such act is within the scope of the agent's authority or the course of his employment as agent or not), or for showing or having shown favour or disfavour to any person in relation to the principal's affairs or business.
(2) Any gift or other consideration given or offered or agreed to be given to any parent, husband, wife, civil union partner, de facto partner, or child of any agent, or to his partner, clerk, or servant, or (at the agent's request or suggestion) to any other person, shall be deemed for the purposes of this section to have been given or offered or agreed to be given to the agent.

Role of the SFO

The Serious Fraud Office (SFO) was established in 1990 under the Serious Fraud Act in response to the collapse of financial markets in New Zealand at that time.

The SFO operates three investigative teams:

  • Fraud Detection & Intelligence;
  • Financial Markets & Corporate Fraud; and
  • Fraud & Corruption.

The SFO operates under two sets of investigative powers.

Part I of the SFO Act provides that it may act where the Director "has reason to suspect that an investigation into the affairs of any person may disclose serious or complex fraud."

Part II of the SFO Act provides the SFO with more extensive powers where: "...the Director has reasonable grounds to believe that an offence involving serious or complex fraud may have been committed..."

The SFO's Statement of Intent 2011-2014 sets out the SFO's three year strategic goals and performance standards. It is available online at: