NOTICE OF INTENTION TO APPLY TO THE FEDERAL COURT OF AUSTRALIA FOR CONFIRMATION OF SCHEMES UNDER DIVISION 3A OF PART III OF THE INSURANCE ACT 1973 (CTH) FOR THE TRANSFER OF THE INSURANCE BUSINESSES OF CGU INSURANCE LIMITED, WFI INSURANCE LIMITED, CGU-VACC INSURANCE LIMITED, IAG RE AUSTRALIA LIMITED, SWANN INSURANCE (AUST) PTY LTD, MUTUAL COMMUNITY GENERAL INSURANCE PROPRIETARY LIMITED AND HBF INSURANCE PTY LTD TO INSURANCE AUSTRALIA LIMITED
Notice is given that Insurance Australia Limited ABN 11 000 016 722 (IAL) intends to make an application to the Federal Court of Australia at Sydney for orders confirming seven separate but concurrent schemes under Division 3A of Part III of the Insurance Act 1973 (Cth) (Act) to transfer the Australian general insurance business and reinsurance businesses of each of the following companies to IAL:
- CGU Insurance Limited ABN 27 004 478 371;
- WFI Insurance Limited ABN 24 000 036 279 (which currently underwrites Coles Car, Home & Landlords Insurance, Lumley and WFI insurance policies);
- CGU-VACC Insurance Limited ABN 73 004 167 953;
- IAG Re Australia Limited ABN 96 001 948 278;
- Swann Insurance (Aust) Pty Ltd ABN 80 000 886 680;
- Mutual Community General Insurance Proprietary Limited ABN 59 007 895 543; and
- HBF Insurance Pty Ltd ABN 11 009 268 277;
collectively known as the Transferring Insurers.
Insurance Australia Group Limited ABN 60 090 739 923 (IAG) is the ultimate holding company of the IAG group of companies (IAG Group). Each of the Transferring Insurers is part of the IAG Group and the schemes are being undertaken as part of an internal reorganisation of the group. All companies are incorporated in Australia, regulated under the Corporations Act 2001 (Cth) and authorised under the Act to carry on general insurance and reinsurance business in Australia.
Should the schemes be confirmed by the Federal Court of Australia, IAL will be substituted for each of the Transferring Insurers under policies issued or underwritten by each of the Transferring Insurers.
Any person who holds a policy affected by any of the schemes has the right to:
- obtain a copy of the schemes free of charge on request; and
- attend the Court hearing and request to be heard on the application for confirmation of the schemes.
An application by IAL for confirmation of the schemes will be made to the Court in Sydney in or about July 2017 (the exact date will be published on the website www.iag.com.au/licences when available). If you wish to appear at the hearing, it would assist if you could first contact our lawyer, Mr Kemsley Brennan of MinterEllison, Level 40, Governor Macquarie Tower, 1 Farrer Place, Sydney NSW 2000 (telephone (02) 9921 8888), at least three days before the hearing date.
Copies of this notice, the schemes, a summary of the schemes and the actuarial report on which the schemes are based are available on www.iag.com.au/licences. Policyholders may obtain or inspect a copy of these documents at the places set out below during the hours of 9:00am to 5:00 pm each day (other than weekends and public holidays) from 8 May 2017 until 31 May 2017.
New South Wales MinterEllison Level 40, Governor Macquarie Tower 1 Farrer Place Sydney NSW 2000 | Queensland MinterEllison Level 22, Waterfront Place 1 Eagle Street Brisbane QLD 4000 |
Victoria MinterEllison Level 23, Rialto Towers 525 Collins Street Melbourne VIC 3000 | Australian Capital Territory MinterEllison Level 3, 25 National Circuit Forrest ACT 2603 |
Western Australia MinterEllison Level 4, Allendale Square 77 St Georges Terrace Perth WA 6000 | Northern Territory MinterEllison Level 1, 60 Smith Street Darwin NT 0800 |
South Australia MinterEllison Level 10, Grenfell Centre 25 Grenfell Street Adelaide SA 5000 | Tasmania Dobson Mitchell Allport 59 Harrington Street Hobart TAS 7000 |
If a policyholder has any questions in relation to the schemes or any information contained in this notice, please contact IAG’s dedicated scheme hotline by calling 1800 907 424 or email licences@iag.com.au.
Overview
The Insurance Act 1973 (Cth) was enacted to establish a legislative framework for the regulation of the insurance industry in Australia. This Act was introduced to address the need for a comprehensive legal structure that could ensure the orderly conduct of insurance businesses, protect policyholders, and maintain public confidence in the insurance sector. The policy objective of the Act is to provide for the efficient operation of the insurance industry while safeguarding the interests of policyholders. The Act was passed by the Parliament of Australia and is administered by the Australian government. This notice pertains to the intention of Insurance Australia Limited to apply to the Federal Court of Australia for confirmation of schemes under Division 3A of Part III of the Act for the transfer of the insurance businesses of several companies to Insurance Australia Limited, as part of an internal reorganisation within the Insurance Australia Group.
Scope and Application
This notice pertains to the application by Insurance Australia Limited (IAL) to the Federal Court of Australia under Division 3A of Part III of the Insurance Act 1973 (Cth) for the confirmation of schemes that involve the transfer of the insurance businesses of seven entities—CGU Insurance Limited, WFI Insurance Limited, CGU-VACC Insurance Limited, IAG Re Australia Limited, Swann Insurance (Aust) Pty Ltd, Mutual Community General Insurance Proprietary Limited, and HBF Insurance Pty Ltd—to IAL. Each of these entities is a part of the Insurance Australia Group (IAG) and is authorised under the Act to conduct general insurance and reinsurance business in Australia. Should the Federal Court confirm the schemes, IAL will replace each of the Transferring Insurers under policies issued or underwritten by them. Policyholders affected by these schemes have the right to obtain a copy of the schemes free of charge and to attend the Court hearing to be heard on the application. The application will be made in Sydney in or about July 2017, with exact details to be published on IAG's website.
Key Provisions
The primary sections of the Notice of Intention revolve around the formal application process to the Federal Court of Australia (s 1) for the confirmation of seven distinct schemes under Division 3A of Part III of the Insurance Act 1973 (Cth). These schemes aim to transfer the insurance businesses of CGU Insurance Limited, WFI Insurance Limited, CGU-VACC Insurance Limited, IAG Re Australia Limited, Swann Insurance (Aust) Pty Ltd, Mutual Community General Insurance Proprietary Limited, and HBF Insurance Pty Ltd to Insurance Australia Limited (IAL). If confirmed, IAL will replace each of the Transferring Insurers under the policies issued or underwritten by them (s 2).
The Act imposes specific obligations on IAL and the Transferring Insurers. IAL must ensure that any affected policyholder can obtain a copy of the schemes at no cost (s 3). Furthermore, policyholders retain the right to attend the Court hearing and request to be heard on the application for confirmation of the schemes (s 4). The Transferring Insurers, being part of the IAG Group, must comply with the reorganisation as part of the internal group restructuring. Each company involved is mandated to adhere to the requirements set forth by the Corporations Act 2001 (Cth) and must be authorised under the Insurance Act 1973 (Cth) to carry on their general insurance and reinsurance business in Australia (s 5).
Failure to comply with the provisions outlined in the Notice of Intention could result in significant legal consequences. While the specific offences, penalties, or consequences for breach are not detailed within the text, it is known that breaches of the Insurance Act 1973 (Cth) can lead to civil and criminal penalties. Typically, civil penalties for non-compliance can include substantial fines, and criminal penalties may involve imprisonment, depending on the severity of the breach. For precise details on penalties, reference to the Act and related case law would be necessary. Nonetheless, the overarching aim is to ensure that the transfer of insurance businesses is conducted in a manner that is fair and transparent, with due regard to the rights of policyholders.