Notice of Intention to Apply to the Federal Court OF AUSTRALIA for Confirmation of Scheme under Division 3A of Part III of the Insurance Act 1973 (CTH) TO TRANSFER THE INSURANCE BUSINESS OF W. R. BERKLEY INSURANCE (EUROPE), lIMITED (aUSTRALIAN BRANCH) TO BERKLEY INSURANCE COMPANY (AUSTRALIAN BRANCH)
Notice is given that W. R. BERKLEY INSURANCE (EUROPE), lIMITED ABN 81 126 483 681 (W. R. Berkley) proposes to make an application to the Federal Court of Australia seeking confirmation of a scheme under Division 3A of Part III of the Insurance Act 1973 (Cth) to transfer all of the insurance business of the Australian branch of W. R. Berkley to the Australian branch of Berkley Insurance Company ABN 53 126 559 706 (Berkley Insurance).
Each of W. R. Berkley and Berkley Insurance is part of an international insurance group headed by W. R. Berkley Corporation. The scheme is being undertaken as part of a business reorganisation within the group.
As a consequence of the scheme, Berkley Insurance will be substituted for W. R. Berkley under policies issued or underwritten by W. R. Berkley.
The date fixed for the hearing of the application is 27 June 2016 at 10:15am or on such other date as the Court appoints. The hearing will be held at the New South Wales Registry of the Federal Court of Australia which is located at the Law Courts Building, Queens Square, Sydney NSW 2000.
Any policyholder who may be affected by the scheme can ask to be heard by the Court on the application for the confirmation of the scheme.
In order to assist you in assessing whether you may be an affected policyholder of W. R. Berkley, please note the following in relation to the insurance business conducted by W. R. Berkley in Australia:
a) W. R. Berkley distributes its general insurance products only through insurance brokers and does not issue policies of insurance directly to the public;
b) Brokers offer W. R. Berkley insurance products via industry and trade associations, and business groups where products may be marketed under the name of such organisations;
c) Brokers offer W. R. Berkley insurance products via work-place and professional organisations and where the insurance cover is provided to members as part of the membership of such organisations;
d) W. R. Berkley’s insurance products include a range of public and product liability, professional indemnity, medical malpractice and management liability insurance covers.
If you have a policy of the above kind arranged through a broker, we recommend that you check whether W. R. Berkley is the insurer to determine if you may be an affected policyholder.
It is important that policyholders affected by the scheme take notice of the scheme and consider whether they wish to attend the hearing. If a policyholder wishes to be heard at the hearing, it would assist if you let Dean Carrigan of Clyde & Co Australia know (by phone: (02) 9210 4400 or email: Dean.Carrigan@clydeco.com) at least 3 days before the date fixed for the hearing.
Copies of this notice, the scheme, a summary of the scheme and the actuarial report upon which the Scheme is based are accessible on www.berkleyinaus.com.au. Copies of the scheme and the actuarial report will also be available for inspection by affected policyholders between 25 May 2016 to 16 June 2016 (inclusive), between 9:00am and 5:00pm (local time) Monday to Friday (other than public holidays) at the following addresses:
New South Wales Clyde & Co Australia
Level 30, 420 George Street
Sydney NSW 2000 | South Australia Ernst & Young
121 King William Street
Adelaide SA 5000 |
Victoria Clyde & Co Australia
Level 26, 140 William Street
Melbourne VIC 3000 | Tasmania WLF Accounting & Advisory
Level 1, 160 Collins Street
Hobart TAS 7000 |
Queensland Clyde & Co Australia
Level 22, 12 Creek Street Brisbane QLD 4000 | Australian Capital Territory Ernst & Young
121 Marcus Clarke Street
Canberra ACT 2601 |
Western Australia Clyde & Co Australia
Level 28, 197 St Georges Terrace
Perth WA 6000 | Northern Territory Merit Partners
Level 2, 9-11 Cavanagh Street
Darwin NT 0800 |
A policyholder affected by the scheme may also obtain a copy of the scheme free of charge by contacting Mr Chris Flanagan, Regional Compliance Officer, Berkley Insurance by calling (02) 8117 2143.
If a policyholder has any questions in relation to the scheme or any information contained in this notice, please contact Mr Chris Flanagan, Regional Compliance Officer, Berkley Insurance by calling (02) 8117 2143.
Overview
The Insurance Act 1973 (Cth) was enacted to regulate the insurance industry in Australia, aiming to protect policyholders by ensuring that insurance companies are financially stable and capable of meeting their obligations. The Commonwealth Parliament established this Act to address gaps in insurance regulation and to provide a framework for the orderly conduct of insurance business. The policy objective of the Act includes maintaining public confidence in the insurance industry, protecting policyholders, and facilitating the efficient operation of the insurance market. The Act provides a comprehensive regulatory structure that governs the authorisation, conduct, and supervision of insurers, including provisions for the reorganisation and transfer of insurance business as seen in the case of W. R. Berkley Insurance (Europe), Limited (Australia Branch) seeking to transfer its insurance business to Berkley Insurance Company (Australian Branch).
Scope and Application
The Insurance Act 1973 (Cth) applies to this notice of intention to transfer the insurance business of W. R. Berkley Insurance (Europe), Limited (Australian Branch) to Berkley Insurance Company (Australian Branch). This legislation is part of the Commonwealth of Australia's legal framework governing insurance activities. The scheme under Division 3A of Part III of the Insurance Act 1973 (Cth) pertains specifically to the entities involved in the insurance business transfer, namely W. R. Berkley Insurance (Europe), Limited (Australian Branch) and Berkley Insurance Company (Australian Branch). The application to the Federal Court of Australia for confirmation of the scheme is intended to ensure that the transfer complies with Australian insurance laws and protects the interests of policyholders affected by the reorganisation within the international insurance group headed by W. R. Berkley Corporation. The geographic reach of this application is national, as it involves entities operating under Australian jurisdiction, and it extends to all policyholders potentially affected by the business transfer across Australia. The Act does not specify any exclusions, exemptions, or thresholds in this context, but it allows for the Federal Court to make determinations on the confirmation of the scheme based on the presented evidence and legal arguments. Subordinate instruments or regulations may provide further details on the procedural aspects of the scheme confirmation process.
Key Provisions
The notice given under the Insurance Act 1973 (Cth) indicates that W. R. Berkley Insurance (Europe), Limited intends to submit an application to the Federal Court of Australia for confirmation of a scheme (sections 114A-114H). This scheme aims to transfer the insurance business of W. R. Berkley's Australian branch to Berkley Insurance Company's Australian branch, as part of a broader reorganisation within the international insurance group. This transfer will result in Berkley Insurance Company replacing W. R. Berkley as the insurer under policies issued or underwritten by W. R. Berkley.
Under this legislation, W. R. Berkley and Berkley Insurance are required to provide a detailed scheme outlining the proposed transfer and ensure that the interests of policyholders are considered. The Act mandates that affected policyholders be given the opportunity to be heard at the hearing of the application. This means that any policyholder who believes they may be affected by the scheme can request to speak at the hearing to voice any concerns or objections. The notice advises policyholders on how to determine if they are affected and how to contact the relevant parties if they wish to participate in the hearing.
There are no specific offences, penalties, or civil/criminal consequences mentioned in the notice regarding this particular scheme. However, if the Federal Court finds that the scheme is fair and equitable to policyholders and complies with the requirements of the Insurance Act 1973 (Cth), it will confirm the scheme, allowing the transfer of business to proceed. Conversely, if the Court finds the scheme to be unfair or not in compliance with the Act, it may reject the scheme, which would prevent the business transfer from going ahead. The notice also emphasises the importance of policyholders reviewing the scheme and considering their position, which indirectly pressures the parties involved to ensure the scheme is fair and transparent.