APRA has received a notice from the Office of the Controller of Insurance in the Solomon Islands that the registration International Unity Insurance (General) Limited has been cancelled with effect from 4.30pm, 16 April 2002. As a result neither that company, nor its parent International Unity Insurance Co. Ltd, is authorised as an insurer in the Solomon Islands.
APRA has advised International Unity Insurance immediately to direct its administrators and brokers in Australia not to accept or renew contracts of insurance. Under a directive from APRA in late March, International Unity Insurance instructed their brokers not to write any new business in Australia. It has today confirmed to APRA that this instruction remains in force.
International Unity Insurance has been actively promoting itself through its Australian administrators and its brokers as offering insurance products in competition with other insurers in Australia.
It has represented to consumers that it is a licensed general insurer in the Solomon Islands, and that it has substantial capital to support any claims under insurance policies it enters into. As noted above, International Unity Insurance is no longer registered as an insurer in the Solomon Islands; moreover it has declined to allow APRA to have its capital backing independently verified.
It is important that Australian consumers understand that these companies - International Unity Insurance Co. Limited and International Unity Insurance (General) Limited - are not currently authorised to carry on insurance business in Australia or the Solomon Islands.
Consumers taking out insurance with unauthorised foreign insurers risk losing the protections provided as a result of authorisation. Additionally policyholders may be at a significant disadvantage should a dispute arise under a policy. Enforcing their contractual rights may be expensive and uncertain.
APRA has also cautioned International Unity Insurance that its operations to date may constitute the carrying on of insurance business in Australia, which is a breach of the Insurance Act 1973. Unless International Unity Insurance obtains authorisation under the Insurance Act, or demonstrates that it is in fact not carrying on insurance business in Australia, it risks being in breach of penalty provisions of the Insurance Act.
It is an offence under section 21 of the Insurance Act for a person to carry on insurance business in Australia without being authorised to do so under the Act. Companies authorised under the Act must meet the Acts solvency and reporting requirements and must comply with any directions given to the company in the event that it gets into financial difficulty and fails to comply with the conditions of its authority.
Should consumers be approached with offers of insurance products underwritten by either of these companies, they should immediately contact APRA through its enquiry line on 1300 131060.
A list of all companies authorised to conduct insurance business in Australia appears on APRAs website at www.apra.gov.au.
Note to Editors: Please also refer to APRA media release date 15/4/02 titled "Unauthorised Foreign Insurers Issuing Insurance Products In Australia"
