Federal Court approves CCI claim payment scheme
The Federal Court has approved a Catholic Church Insurance (CCI) arrangement to provide for the “orderly” payment of claims in the event that it faces the risk of insolvency.
CCI policyholders voted in favour of the scheme of arrangement last week and the process was cleared by Federal Court Justice Ian Jackman at a hearing on Thursday.
“The scheme is one which seeks to preserve CCI’s capital position and avoid the adverse consequences of insolvency, so as to achieve an orderly run off and the settlement of scheme claims as quickly and fairly as possible,” Justice Jackman said.
“CCI submits, and I accept, that the court should exercise its discretion to approve the scheme.”
Based on estimates of claims as of May 31, CCI has assessed it has sufficient assets to meet its liabilities as they fall due, but it says the claims situation will continue to develop and there’s a high degree of complexity and uncertainty.
The arrangement could see a percentage of claims paid initially, rather than the full amount, while averting reinsurance issues and other costs CCI would face if it was to become insolvent. The scheme applies to policy areas other than workers’ compensation.
“In receiving the Federal Court approval of its scheme of arrangement, following the unanimous approval at Tuesday’s scheme creditor meeting, CCI is now in a stable financial position to run-off its operations over the coming years,” CCI said in a statement to insuranceNEWS.com.au.
“The board and CCI appreciate that recent months and years have been a difficult time for everyone and remain committed to managing the run-off of the organisation in the best interests of survivors, policyholders, staff, shareholders and the wider community.”