Transfer of the insurance business of Realcover Insurances Pty Limited to QBE Insurance (Australia) Limited

29 May 2020

Realcover Insurances Pty Limited (Realcover) was placed into 'run-off' from 30 June 2017, which means that it no longer issues new insurance contracts. Since that time, Realcover has been managing its portfolio of existing insurance business, including handling claims. However, due to ongoing costs and the time it will take to run off the portfolio completely, Realcover has entered into an arrangement to transfer Realcover's portfolio to QBE Insurance (Australia) Limited (QBE) under the Insurance Act 1973 (Cth), which enables insurance business to be transferred by way of a scheme.

The proposed transfer, or 'Scheme', is based on the independent actuarial report of Mr Warrick Gard of EY dated 7 February 2020, who has concluded that there will be no material adverse impact on policyholders of Realcover or QBE as a result of the transfer and that Realcover's policyholders will benefit from the larger capital base of QBE in the event of any significant adverse 'run off' developments. Mr Gard's conclusions are supported by reports from the appointed actuaries of both Realcover and QBE.

The effective date of the transfer is proposed to be 30 June 2020, however the Scheme first requires confirmation by the Federal Court of Australia (the Court). Affected policyholders may request to be heard by the Court should they have grounds for believing the Scheme may not be in the interests of policyholders viewed as a whole.

QBE is making an application for confirmation of the Scheme which is due to be heard in Sydney at 8.30am on Friday, 26 June 2020, although the Court may appoint a later date for the hearing.

If you are insured under an insurance contract issued by or on behalf of Realcover, or if you may otherwise be affected by the Scheme, then you are an 'affected policyholder' and you have an entitlement to attend the hearing and be heard by the Court on the application for confirmation of the Scheme.

Due to the COVID-19 pandemic, the Court is modifying its practices in order to minimise in person attendance on Court premises. Accordingly, the Court will make arrangements for the hearing of the confirmation application using remote access and file-sharing technology.

If you wish to attend and be heard at the hearing, please notify the Court by contacting the Associate to Justice Lee by email ([email protected]) by no later than 19 June 2020. The Court will then make arrangements to allow you to be heard.

If you have no objection to the Scheme, you do not need to take any action.

QBE and Realcover recommend that you read the following documents, which provide more information about the Scheme and which include the actuarial reports referred to above.

  1. Notice of Intention
  2. Scheme Summary
  3. Scheme document
  4. Actuarial reports

If you would like a copy of any of these documents free of charge, or if you have any other enquiries in relation to the Scheme, please contact Genevieve Staff on +61 2 8227 8250 or by email at [email protected].