Charges laid against Herbert Insurance founder

Herbert Insurance Group owner Grant Malcolm Herbert has been charged with 28 counts under the Crimes Act and Secret Commissions Act related to the collapse of his boutique insurance brokerage.

Mr Herbert, 61, has been the subject of a Serious Fraud Office (SFO) investigation since March last year, when his Auckland-based brokerage collapsed owing millions to the country's largest insurers.

He appeared today in Auckland District Court, where the charges were laid. No plea was entered.

NBR ONLINE revealed search warrants were executed during a raid at Mr Herbert’s East Tamaki home as part of the SFO's investigation last year.

Details are now available as to what the SFO was suspicious of at the Queen St-based  brokerage.

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 to obtain a credit facility

- corruptly giving an employee of a customer a secret commission for referring insurance business to the Herbert Insurance Group.

The SFO alleges 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 Herbert Insurance Group and to fund his lifestyle.

It is also alleged an insured customer was over-charged and the illicit profit was shared between Herbert and the employee of the customer.

When Mr Herbert’s brokerage was placed into receivership and liquidation in March last year, there was a shortfall of $3.1 million, owed to big insurers.

Before it collapsed, Herbert Insurance had more than 3000 customers and 7000 policies.

Some of those customers found the insurance they believed they had obtained had not, in fact, been underwritten by insurance companies.

Receivers KordaMentha swiftly sold the client book to insurance giant Aon for an undisclosed sum.

KordaMentha’s latest receivers report reveals there is likely to be a shortfall to secured creditor ASB, owed $948,000.

The May report also warns there is no money to pay preferential creditors which at the date of receivership (March 2011) totalled $392,000.

Unsecured creditors owed $85,000 will also be out of pocket.

Mr Herbert was declared bankrupt at Auckland High Court earlier this month over debt on a residential property.

Liquidators Corporate Finance are also investigating the company for possible breaches of the Companies Act and other insurance-related legislation and if there are any other recovery avenues available.

The SFO opened its investigation into Herbert Insurance in March last year, after receiving a complaint.

Mr Herbert set up Herbert Insurance Group in 1981.

He drives a silver Mercedes-Benz S class – worth about $80,000 – and, according to the electoral roll, lives in a 380sq m section on Point View Drive with a rateable value of $1.625 million.

Got a question about this story? Leave it in Comments & Questions below.

This article is tagged with the following keywords. Find out more about MyNBR Tags

Comments & Questions

Commenter icon key: Subscriber Verified

Post New comment or question

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.

NZ Market Snapshot


Sym Price Change
USD 0.7313 -0.0020 -0.27%
AUD 0.9217 0.0070 0.77%
EUR 0.6142 -0.0035 -0.57%
GBP 0.5423 -0.0014 -0.26%
HKD 5.7066 -0.0123 -0.22%
JPY 82.2370 -0.2980 -0.36%


Commodity Price Change Time
Gold Index 1301.0 -9.900 2017-09-20T00:
Oil Brent 56.3 1.090 2017-09-20T00:
Oil Nymex 50.7 1.150 2017-09-20T00:
Silver Index 17.3 0.055 2017-09-20T00:


Symbol Open High Last %
NZX 50 7851.1 7851.1 7819.2 -0.30%
NASDAQ 6459.7 6466.1 6461.3 -0.08%
DAX 12602.0 12621.3 12569.2 0.29%
DJI 22351.4 22413.3 22370.8 0.19%
FTSE 7271.9 7289.2 7271.9 -0.11%
HKSE 28091.2 28184.4 28127.8 -0.06%
NI225 20456.5 20481.3 20310.5 0.18%
ASX 5709.1 5709.1 5709.1 -0.94%