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ARTICLE · 03 NOVEMBER 2009

Protecting Policyholders - Financial Claims Scheme Modified - How The Changes Affect You...

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The Insurance Amendment Regulations 2009 (No.1) (Regulations) were released on 29 October 2009.

AustraliaInsurance
Ray Giblett
Ray Giblett
Greg Moss
Greg Moss

The Insurance Amendment Regulations 2009 (No.1) (Regulations) were released on 29 October 2009. The Regulations amend the Financial Claims Scheme (FCS), first established in October 2008 following the recommendations of the HIH Royal Commission. The FCS seeks to protect policyholders (of certain classes) who make claims on a general insurance policy in a situation where the insurance company is insolvent.

The changes

The Regulations clarify three key issues.

  1. That the FCS is not intended to cover policy liabilities that were incurred by a foreign general insurer's Australian branch, if the liability was incurred before the branch received authorisation under section 12 of the Insurance Act 1973 to operate as a general insurer in the Australian market.

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