Transfer of the insurance business of Realcover Insurances Pty Limited to QBE Insurance (Australia) Limited
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).
QBE made a successful application for confirmation of the Scheme which was heard in the Court at Sydney at 8.30am on Friday, 26 June 2020, and on 1 July 2020, the Realcover business transferred to QBE.