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Media Releases |
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20/06/2005, High Court appeal significant for Australian insurance policyholders
On Friday, 17 June 2005 the High Court granted Australian insurer, Assetinsure, leave to appeal against the decision of the NSW Court of Appeal in the New Cap Re case.
The case hinges on the way in which assets of an insolvent insurance company are to be distributed. New Cap Re, an Australian reinsurer, went into liquidation in 1999 owing significant amounts to local and foreign creditors.
The Insurance Act protects Australian policyholders in a winding up, giving them a payment priority, by requiring liquidators to use assets in Australia to pay Australian liabilities ahead of all other liabilities.
The issue for the courts was how far this protection extended and what was meant by Australian liabilities. Two major liquidations, New Cap Re and HIH have stalled due to the uncertainty.
John Hewitt, General Counsel for Assetinsure said: “We sought leave to appeal to the High Court because we felt the protection system for Australian policyholders was being diluted. The High Court has granted us leave to appeal because it recognised the case as one of general importance”.
Mr Hewitt said: “The fundamental protection for Australian policyholders provided by the law is the requirement for insurers to have assets in Australia exceeding liabilities in Australia. This is an important test of the APRA guidelines and policyholder protection in Australia".
About Assetinsure
Assetinsure is an Australian-owned company that brings additional choice to the Australian insurance market through the provision of specialist insurance products such as Professional Indemnity, Directors & Officers, Property, Construction and Financial Risk. The company is owned by Assetinsure Holdings which is backed by Babcock & Brown (50%), Asset Underwriting Group (25%) and other private investors (25%). For more details and financial information please visit the website, www.assetinsure.com.au.
For more information
John Hewitt
General Counsel
Assetinsure Pty Limited
T: (02) 8274 2831
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