Insurance policyholders covered under the Financial Claims Scheme
In the unlikely event that a general insurer fails, if the Australian Government activates the Financial Claims Scheme (FCS) most policyholders will be covered under the FCS or claims up to $5,000. Other persons or third parties may also be able to claim under certain eligible policies with the affected insurer under the FCS. There are some policies that are excluded - see the General insurer FAQs.
In addition, the following policyholders with the failed general insurer will be covered under the FCS for claims of $5,000 and above:
- individuals who are Australian citizens or permanent residents
- non-resident individuals who have insured against risks located in Australia
- Australian-based small businesses, as defined under the Income Tax Assessment Act 1997
- Australian-based not-for-profit organisations
- trustees of Australian-based family trusts
Insurance policies held by medium and large businesses are covered under the FCS for claims up to $5,000.
The FCS also applies to certain third parties who are able to claim against a general insurer under a policy issued to another party by that insurer.
The FCS does not apply to policies issued by life insurance companies or private health insurance companies.