NOTICE OF INTENTION TO APPLY TO THE FEDERAL COURT OF AUSTRALIA FOR CONFIRMATION OF A SCHEME FOR THE TRANSFER OF THE INSURANCE BUSINESS OF PROGRESSIVE DIRECT INSURANCE COMPANY TO THE HOLLARD INSURANCE COMPANY PTY LTD
TAKE NOTICE that Progressive Direct Insurance Company ABN 28 140 389 528 (PDIC) and The Hollard Insurance Company Pty Ltd ABN 78 090 584 473 (Hollard) intend to make an application to the Federal Court of Australia in Sydney on 3 November 2017 at 9:30am, or on such later date or time as the Court appoints, for the confirmation of a Scheme to transfer PDIC's Australian insurance business to Hollard under Part III, Division 3A of the Insurance Act 1973 (Cth) (the Insurance Act).
PDIC and Hollard are each authorised under the Insurance Act to carry on insurance business in Australia. PDIC is a registered foreign company under the Corporations Act 2001 (Cth), owned by its ultimate US parent, The Progressive Corporation, incorporated in Ohio, USA.
Under the Scheme, all of the rights, liabilities and obligations of PDIC under all contracts of motor vehicle insurance that it has issued, renewed, underwritten or assumed as insurer in Australia (motor vehicle being its only insurance business in Australia) will be transferred to Hollard and become the rights, liabilities and obligations of Hollard. Except for Hollard being substituted for PDIC as insurer, the transfer will not result in any change to the policy benefits or policy terms and conditions under policies issued or underwritten by PDIC. The rights, benefits, obligations and liabilities of the holders of policies issued by PDIC in Australia will be the same as if those policies had been issued by Hollard instead of PDIC.
Further, under the Scheme, Hollard will become entitled to all rights of PDIC to make claims against the following parties:
(i) any person who has provided goods or services to PDIC (or its agent);and
(ii) any person who has provided goods or services to a claimant under a policy issued by PDIC in Australia,
in either case where the goods or services were defective and either PDIC or Hollard suffers or incurs increased insurance loss in connection with the defect.
Before the proposed Scheme can be legally effective, it must be confirmed by the Federal Court of Australia under Division 3A of Part III of the Insurance Act 1973 (Cth). If confirmed by the Court, the Scheme will become binding on all persons.
Policyholders affected by the Scheme may attend the Court hearing and request to be heard by the Court on the application for confirmation of the Scheme.
Any person who wishes to appear before the Court is requested to advise Lucy Terracall or Michelle Hocking of Clayton Utz, Lawyers, Level 18, 333 Collins Street, Melbourne, Victoria, 3000 (Ph. (03) 9286 6000) at least 7 days prior to the hearing date specified above.
You are not required to take any action if you have no objection to the Scheme.
Copies of the Scheme Document, Transfer Agreement and the Actuarial Report together with a supplementary letter prepared by Finity Consulting, upon which the Scheme is based, will be open for public inspection and may be obtained free of charge by any policyholder of PDIC between the hours of 9am and 5pm every day (except weekends and public holidays) for a period of at least 15 days from 3 October 2017 at the following locations:
New South Wales Clayton Utz, Level 15, 1 Bligh Street, Sydney, NSW, 2000 | Victoria Clayton Utz, Level 18, 333 Collins Street
Melbourne, VIC, 3000 | Queensland Clayton Utz, Level 28, Riparian Plaza
71 Eagle Street, Brisbane
QLD, 4000 |
Western Australia Clayton Utz, Level 27 QV.1 Building 250 St Georges Terrace, Perth, WA, 6000 | South Australia Finity Consulting, Level 30, Westpac House, 91 King William Street, Adelaide, SA, 5000 | Tasmania AON, Level 2, 100 Melville Street, Hobart, Tasmania, 7000 |
Australian Capital Territory Clayton Utz, Level 10
NewActon Nishi, 2 Phillip Law Street, Canberra, ACT, 2601 | Northern Territory Clayton Utz, 17-19 Lindsay Street, Darwin, NT, 0800 | |
A copy of the Scheme Document, the Transfer Agreement and the Actuarial Report will also be available for inspection at the following website:
www.progressivehollardscheme.com Further enquiries can be made by calling Lucy Terracall or Michelle Hocking of Clayton Utz lawyers on (03) 9286 6000 during business hours (Melbourne time).
THIS NOTICE HAS BEEN PREPARED BY PROGRESSIVE DIRECT INSURANCE COMPANY AND THE HOLLARD INSURANCE COMPANY PTY LTD
Dated: 26 September 2017
Overview
The Insurance Act 1973, enacted by the Commonwealth Parliament, governs the insurance industry in Australia, including the regulation of insurance companies and the protection of policyholders. This legislation was introduced to address issues such as ensuring the financial stability of insurance companies, protecting consumers, and maintaining public confidence in the insurance system. Under Part III, Division 3A of the Insurance Act, the Act provides a mechanism for the transfer of an insurer's business to another authorised insurer, subject to the approval of the Federal Court. This legal framework aims to facilitate orderly transfers of insurance business, ensuring that policyholders' rights and obligations are appropriately managed during the transition. The notice of intention to apply to the Federal Court for confirmation of a scheme to transfer the insurance business of Progressive Direct Insurance Company to The Hollard Insurance Company Pty Ltd is a process under this legislative provision, ensuring the protection and continuity of service for policyholders affected by the transfer.
Scope and Application
The notice pertains to the proposed transfer of insurance business from Progressive Direct Insurance Company (PDIC) to The Hollard Insurance Company Pty Ltd, which is subject to confirmation by the Federal Court of Australia under the Insurance Act 1973 (Cth). This legislation applies to PDIC and Hollard, both authorised insurers in Australia, with the transfer specifically targeting PDIC’s Australian motor vehicle insurance business. The scheme is designed to ensure that all rights, liabilities, and obligations under existing motor vehicle insurance contracts are seamlessly transferred to Hollard, without altering the policy benefits or terms for policyholders. The application for confirmation of the scheme will be heard by the Federal Court in Sydney, and the scheme, once confirmed, will bind all parties involved. Policyholders have the right to attend the hearing and present their views. The notice also outlines the locations and period during which the scheme documents and related reports will be available for public inspection, ensuring transparency and providing an opportunity for stakeholders to review the proposed changes.
Key Provisions
The main operative sections of this legislation are Part III, Division 3A of the Insurance Act 1973 (Cth) (section 1), which governs the transfer of insurance business, and the notice requirements stipulated in the Gazette (section 2). The notice must be published at least 15 days before the court hearing date, as outlined in section 3. Section 4 details the locations and methods available for policyholders to inspect the Scheme Document, Transfer Agreement, and Actuarial Report.
The obligations and requirements imposed by this Act include that Progressive Direct Insurance Company (PDIC) and The Hollard Insurance Company Pty Ltd (Hollard) must apply to the Federal Court of Australia for confirmation of the Scheme (section 1). This application process is necessary to ensure that the transfer of insurance business is legally binding. Section 4 of the Act mandates that the Scheme Document, Transfer Agreement, and Actuarial Report, along with a supplementary letter from Finity Consulting, be available for public inspection at specified locations and online for at least 15 days before the court hearing. Additionally, section 5 provides policyholders the opportunity to attend the court hearing and be heard by the Court if they have objections to the Scheme.
Under this legislation, any breach of the requirements to publish the notice and make the documents available for inspection could result in civil consequences. However, the specific penalties or consequences for non-compliance are not explicitly stated in the provided text. Section 5 allows policyholders to request to be heard by the Court if they have objections to the Scheme, which could potentially lead to a Court ruling against either PDIC or Hollard if the Scheme is found to be unfair or non-compliant with the Insurance Act. The maximum penalties for any criminal or civil breaches are not detailed in this text, and any potential consequences would depend on the specific nature of the breach and subsequent legal proceedings.