US-owned Chartis Insurance cancels private death and disability insurance policies of 3000 Australian soldiers
Posted by defensebaseactcomp on January 29, 2012
The Telegraph January 30, 2012
A FOREIGN insurer has left taxpayers with a $2.1 million bill after cancelling the private death and disability insurance policies of 3000 soldiers, including many serving in Afghanistan
US-owned company ( AIG) Chartis Insurance received a discretionary grant of $2.1 million from Defence last year so that the policies could be honoured until August this year, documents show. The grant was based on deployed force numbers and the number of Chartis policyholders in the ADF
The company said that as a result of a smaller than expected insurance pool and high cancellation and payout rates it would have to cancel two of the three types of policies it offers with 60 days notice.
“Approximately 3000 ADF members held Chartis insurance products, with a strong probability that many of the existing policyholders were and are currently deployed,” Defence said.
“Chartis stated in September 2010 it could not continue to incur significant losses and advised Defence that it intended to cancel policies, giving 60 days notice, irrespective of the time the policy has been owned or if the member is currently deployed in an area of operations or within Australia.”
Defence signed a funding deed last May to ensure policies affected by the decision would be secure.
“The grant ensured that extant policies will be honoured by Chartis until August 2012 providing sufficient time for policy holders to make alternative arrangements in light of the commercial decision taken by Chartis,” Defence said.
Chartis Australia chief executive Noel Condon denied the company had cancelled policies but admitted that because of the high number of claims during 2010 it had reduced the maximum payout figure from $750,000 to $250,000.