NEW ZEALAND REPORTS ON DPRK FLAG OF CONVENIENCE

S E C R E T WELLINGTON 000176

SIPDIS

STATE FOR NP, ISN, EUR, EAP/ANP
TREASURY FOR OFAC
NSC FOR STEPHENS

E.O. 12958: DECL: UPON KOREAN REUNIFICATION
TAGS: KNNP MNUC PARM PREL EWWT PHSA KNAR NZ
SUBJECT: NEW ZEALAND REPORTS ON DPRK FLAG OF CONVENIENCE
ISSUE

REF: A. 05 WELLINGTON 900

B. STATE 204250

(U) Classified by Political-Economic Counselor Katherine B.
Hadda. Reasons: 1.4 (b) and (d).


1. (S/REL NZ) A representative of Maritime Mutual Insurance
Association NZ (MMIA) has told a New Zealand official that
the company no longer insures North Korean vessels. The
representative believes that the North Korean ships that had
been insured by MMIA are now being insured by the South of
England Protection and Indemnity Association (Bermuda)
Limited.


2. (S/REL NZ) Paul Rankin, MMIA's Guernsey-based director, on
March 2 told Gavin Quigan of the New Zealand Ministry of
Economic Development's Insurance and Superannuation Unit that
the "insurance tail" -- provisions that apply for a specified
time after the insurance claims policy has been terminated --
of existing insurance contracts with North Korean ships will
end March 31, 2006. When asked if he knew who now insures
those ships, Rankin said he understood that the South of
England Protection and Indemnity Association (Bermuda) was
now the protection and indemnity insurer.


3. (S/REL NZ) Quigan said that Rankin apparently had been
swayed by a claims dispute following what MMIA considered to
be the intentional grounding of a North Korean vessel, in
addition to damage to MMIA's reputation ensuing from negative
publicity within the maritime insurance industry over the
company's connection with North Korea. This information was
provided by Bruce McCallum of the Ministry of Foreign Affairs
and Trade's North America Division, reporting a conversation
he had with Quigan.


4. (S/REL NZ) The New Zealand government does not consider
MMIA to be an insurance company. The government says the
company does not meet New Zealand's legal requirements for
issuing insurance, although it is incorporated in New Zealand
(ref A).
McCormick