The owner of a ferry that sank killing up to 161 people deliberately misled his insurers for many years, a royal commission into the tragedy has found.

The royal commission in Papua New Guinea says the Rabaul Queen’s owner, Captain Peter Sharp, had “little or no respect for people, including those in authority”.

“This gross disrespect was reflected in the appalling and inhumane conditions he was prepared to allow passengers on Rabaul Queen to travel in, and may explain, in part, why he was prepared to compromise the safety of passengers on board his ships,” the royal commission’s report says.

The Rabaul Queen sank in bad weather in the early hours of February 2 while sailing from Kimbe on New Britain Island to Lae on the main island of PNG.

Some 246 people were rescued and four bodies were recovered. The commission has determined that between 142 and 161 people died.

Its report, tabled in the PNG Parliament last week, says a “demonstration of the dishonesty of Captain Sharp was reflected in his dealings with the former insurer of the Rabaul Queen, QBE Insurance PNG, and the insurer at the time of the sinking, Pacific Assurance Group”.

It says the Rabaul Queen was unseaworthy and unsafe. Maintenance was poor and the crew was not qualified to sail the ship.

QBE took up the policy when it acquired the insurance business of Zurich Pacific Insurance in about 2001. In 2009 it offered renewals on eight ships in Captain Sharp’s fleet, rejecting the risk on another 13. Aon was the broker.

The report says the Rabaul Queen was licensed to carry 295 passengers, or 310 people including crew, but was probably transporting 365 to 384 ticketed passengers, 16 crew and 11 children below the age of 3.

Captain Sharp insured the Rabaul Queen for 350 passengers. The royal commission says he misled QBE and Pacific Assurance over the number of people it was licensed to carry and rejected his suggestion the discrepancy was unintentional.

The royal commission says it found many instances of incompetence and ineffectiveness in the PNG National Maritime Safety Authority. Its 34 proposals to improve safety include calls for an independent review of the authority and “proper and effective” enforcement of merchant shipping laws.

The commission held hearings between April and June. In April, Pacific Assurance said the Rabaul Queen was insured for 800,000 kina ($370,000) but no decision had been made on the claim.