The head of New Zealand’s failed Herbert Insurance Group, Grant Herbert, has been charged with crimes relating to theft and forgery.

Mr Herbert, 61, appeared in Auckland District Court last week to face 28 charges under the NZ Crimes Act and Secret Commissions Act. He was not required to enter a plea and the case will return to court on June 13.

The Serious Fraud Office (SFO) alleges that between 2005 and March 2011, Mr Herbert committed offences including theft by a person in a special relationship; using a forged document in relation to obtaining a credit facility; and other offences relating to corruptly giving an employee of a customer secret commissions for referring insurance business to the Herbert group.

It is also alleged he failed to forward premiums received from clients to insurers, in some cases leaving the clients uninsured, and that he diverted the money to pay operating expenses for Herbert Insurance Group “and to fund his lifestyle”.

The SFO says one client was overcharged “and the illicit profit was shared between Herbert and the employee of the customer”.

SFO CEO Adam Feeley says that in the current economic conditions in New Zealand, confidence in the insurance industry and good insurance cover are more important than ever.

“It has been reassuring that the insurance companies for whom Herbert Insurance Group 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,” he said.

Herbert Insurance Group had about 4000 clients when it went into receivership in March last year. The client base was quickly sold to Aon.

The SFO says insurers were owed about $NZ3.1 million ($2.4 million) when the company collapsed.

The latest receiver’s report, issued last month, says that even after the sale of the client book to Aon is finalised in August, the company is unlikely to have funds to repay most of its creditors, including employees.

There is also likely to be a shortfall on any repayment to the secured creditor, ASB Bank, which is owned by the Commonwealth Bank of Australia.

Two liquidators are working with insurers to determine who is entitled to funds in two trust accounts at Herbert.