Integrity Life Australia Limited, in the matter of Integrity Life Australia Limited [2025] FCA 92

Integrity Life Australia Limited, in the matter of Integrity Life Australia Limited [2025] FCA 92

Despite the adverse impacts (including increases in premiums and reductions in benefits for some policy owners), the Court confirmed the scheme as the only viable means to secure ongoing cover for policy owners, noting that most would be substantially worse off if the scheme was not confirmed and Integrity Life Australia's ability to meet obligations would soon be exhausted. The adverse effects are mitigated by the Product Transfer Rules, options for healthy policy owners to seek alternative cover, and the improved financial security for all transferring policy owners. The procedural and substantive requirements for confirmation, including notification and actuarial evidence, were...

Parties
First Applicant: Integrity Life Australia Limited; Second Applicant: AIA Australia Limited; Interested Party: Australian Prudential Regulation Authority
Jurisdiction
Australia
Judgment Date
19 February 2025
Procedural Posture
Application for Confirmation of Scheme of Transfer / Judgment on Confirmation of Scheme
Outcome
Scheme confirmed without modification
Legal Topics
Scheme of Transfer, Life Insurance Business, Confirmation of Schemes, Prudential Regulation, Policyholder Interests
Insurance Law Corporate Law Scheme of Transfer Life Insurance Business Confirmation of Schemes Prudential Regulation Policyholder Interests

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Parties

Integrity Life Australia Limited

First Applicant

AIA Australia Limited

Second Applicant

Australian Prudential Regulation Authority

Interested Party

Procedural Posture

Application for Confirmation of Scheme of Transfer / Judgment on Confirmation of Scheme

Legal Issues

  1. 1 Should the Court exercise its discretion under s 194 of the Life Insurance Act 1995 (Cth) to confirm the scheme transferring part of Integrity Life Australia Limited's life insurance business to AIA Australia Limited, given the adverse impacts on some policy owners?
  2. 2 Whether the procedural and substantive requirements under the Life Insurance Act 1995 (Cth) have been met in seeking confirmation of the scheme?
  3. 3 Is confirmation of the scheme consistent with protecting policy owner interests in the commercial context of a failing insurer?

Ratio Decidendi

Despite the adverse impacts (including increases in premiums and reductions in benefits for some policy owners), the Court confirmed the scheme as the only viable means to secure ongoing cover for policy owners, noting that most would be substantially worse off if the scheme was not confirmed and Integrity Life Australia's ability to meet obligations would soon be exhausted. The adverse effects are mitigated by the Product Transfer Rules, options for healthy policy owners to seek alternative cover, and the improved financial security for all transferring policy owners. The procedural and substantive requirements for confirmation, including notification and actuarial evidence, were...

Court Disposition

Scheme confirmed without modification

Orders

  • Scheme confirming transfer of part of the life insurance business of Integrity Life Australia Limited to AIA Australia Limited pursuant to s 194 of the Life Insurance Act 1995 (Cth) in the form of Annexure A to the orders
  • Scheme to take effect at 12:01 am (AEST) on 1 March 2025