As many as 1000 Australians may be holding worthless policies with Bosnian-based insurer Grand Osiguranje AD Zvornik, according to Australian Securities and Investments Commission (ASIC) Chairman David Knott. He was commenting on a case against four Australian companies which have been writing insurance on behalf of Grand, an unauthorised foreign insurer. ASIC says the companies may not even be authorised by the company to act on its behalf.

ASIC obtained orders against Nikola Banicevic, along with AMCO Insurance Management Group, AMCO Group, ACC AMCO Consortium Company and United Investment Funds.

The orders, which will be heard in court tomorrow, direct Mr Banicevic and the four companies not to accept any new proposal or issue any new policy on behalf of Grand, and says they must not hold out that they have any authority to act on behalf of the insurer. They have also been ordered to deliver to the court any seals used while acting as agents of Grand. Mr Banicevic has also been ordered to hand over his passports, and an interim receiver to the companies has been appointed.

Mr Knott said yesterday that ASIC is conducting enquires in Bosnia and Australia and is “greatly concerned that policies written by the four companies against Grand may be unauthorised and of no value”.

“…our view is that consumers who have taken out policies through the AMCO companies should urgently seek advice from a reputable broker or insurer about the adequacy of their insurance and consider taking additional local cover,” he said.