Steps to be taken before an application for confirmation
58 The steps to be taken before an application for confirmation of the General Insurance Scheme is made are set out in s 17C(2) of the Insurance Act and are supplemented by APRA's prudential standards (relevantly, Prudential Standard GPS 410 Transfer and Amalgamation of Insurance Business for General Insurers (GPS 410)). The steps to be taken before an application for confirmation of the Life Insurance Scheme is made are set out in s 191 of the Life Insurance Act and reg 7 of the Life Insurance Regulations 2024 (Cth).
59 Additionally, in orders made on 30 May 2024 (Dispensation Orders), the Court set out steps for the Applicants to take as a condition of:
(a) the First Applicant being dispensed from complying with s 17C(2)(c) of the Insurance Act; and
(b) the Second Applicant being dispensed from complying with s 191(2) of the Life Insurance Act.
60 As required by s 17C(2)(a) of the Insurance Act, a copy of the General Insurance Scheme has been given to APRA. The Independent General Insurance Actuarial Report has also been given to APRA: First Way Affidavit at [163]-[167]. GPS 410 requires APRA's approval of the summary of the General Insurance Scheme to be obtained before publication of the notice of intention to make the application for confirmation of the scheme: para 8. The scheme summary and the notice of intention were approved by APRA on 10 May 2024 (Second Way Affidavit at [5]-[6] and Exhibit MW-2 at pp 4-7).
61 As required by s 191(2)(a) of the Life Insurance Act, a copy of the proposed Life Insurance Scheme and the Joint Life Actuarial Report have been given to APRA. The Independent Life Actuarial Report has also been given to APRA: First Way Affidavit at [163]-[167].
62 Section 17C(2)(b) of the Insurance Act requires that a notice of intention be published in accordance with GPS 410. Paragraph 9 of GPS 410 requires that a notice of intention, in a form
approved by APRA, be published in the Government Gazette and in one or more newspapers approved by APRA circulating in each Stated Territory which an affected policyholder resides. Paragraph 11 requires that the notice be published before the scheme is released for public inspection. The General Insurance Notice of Intention was approved by APRA on 10 May 2024 (Second Way Affidavit, Exhibit MW-2 at pp 4-7). APRA's approval for the General Insurance Notice of Intention stipulated that the notice be published in the same newspapers in Australia as those stipulated in Order 3(a)(ii) and (iii) of the Dispensation Orders (Second Way Affidavit, Exhibit MW-2 at p 4).
63 Section 191(2)(b) of the Life Insurance Act requires that a notice of intention for a life insurance scheme be published in accordance with s 191(2A) of the Life Insurance Act. Section 191(2A) requires that a notice of intention, in a form approved by APRA, be published in a manner that results in the notice being accessible to the public and reasonably prominent (or in a manner specified in a determination made by APRA, by legislative instrument). The Life Insurance Notice of Intention was approved by APRA on 10 May 2024 (Second Way Affidavit, Exhibit MW-2 at pp 3 and 8-9).
64 Order 3(a) of the Dispensation Orders required that, before the Scheme documents were made available for public inspection, a copy of the General Insurance Notice of Intention and the Life Insurance Notice of Intention be published in the Government Gazette, the Australian, eight nominated metropolitan newspapers in Australia, and six nominated regional newspapers in New Zealand. The General Insurance Notice of Intention and the Life Insurance Notice of Intention were published in the Government Gazette on 11 June 2024, and in the newspapers stipulated in Order 3(a) on 11 June 2024: Lethbridge Affidavit at [11]-[12] and pp 1-26 of Exhibit NL-1. This occurred before the scheme documents were made available for public inspection (which occurred from 12 June 2024 - see below).
65 Order 3(b) of the Dispensation Orders required the Applicants to make a copy of the following documents available for viewing and download at www.standrews.com.au and www.hallmarkinsurance.com.au: General Insurance Notice of Intention, the General Insurance Scheme, the General Insurance Scheme Summary, the Independent General Insurance Actuarial Report, the Life Insurance Notice of Intention, the Life Insurance Scheme, the Life Insurance Scheme Summary, the Independent Life Actuarial Report and the Joint Life Actuarial Report. That was done: Lethbridge Affidavit at [13]-[15]. However, links to the documents were made available on those websites from 7.29am on 12 June 2024, which was before the time when the Schemes were released for public inspection from 9am on 12 June 2024 but not "[b]efore the date on which the Schemes [were] released for public inspection". As such, there has not been strict compliance with order 3(b). The non-compliance is not such as causes me any concern that policyholders or policyowners' interests have been adversely affected or that any person has been deprived of the opportunity to raise any reasonable objection to the schemes. Accordingly, the Applicants submit, and I accept, that the partial non-compliance with order 3(b) ought not impede the Court's exercise of discretion to confirm the scheme: Re OnePath General Insurance Pty Ltd [2023] FCA 1424 at [14].
66 Order 3(c) required a dedicated email address to be established to receive enquiries about the schemes. This was done. 23 emails were received to that address in the period from 11 June to 26 July 2024, none of which contained an objection to either of the schemes: Lethbridge Affidavit at [22].
67 GPS 410 at [12]-[15] sets out requirements for a summary of a general insurance scheme to be approved by APRA. Paragraph [15] of GPS 410 requires that the approved summary must be sent to affected policyholders before the scheme is released for public inspection. The General Insurance Scheme Summary was approved by APRA on 10 May 2024 (Second Way Affidavit, Exhibit MW-2 at pp 4-5 and 10-13).
68 Section 191(2E) of the Life Insurance Act requires that an approved summary for a life insurance scheme be given after the scheme and each actuarial report (if any) on which it is based have been given to APRA, and requires that the approved summary be given at the same time as, or after the notice of intention is published. The Life Insurance Scheme Summary was approved by APRA on 10 May 2024 (Second Way Affidavit, Exhibit MW-2 at pp 3 and 14-17).
69 Order 3(d) of the Dispensation Orders required that, before the schemes were released for public inspection, the Applicants were to cause the General Insurance Scheme Summary and the Life Insurance Scheme Summary to be sent to specified persons as set out in the order. Similarly, order 3(f) required the Applicants to send, or arrange for the third parties listed in Annexure A to the orders, to send the General Insurance Scheme summary to policyholders of General Insurance policies, and the Life Insurance Scheme summary to policyowners of Life
Insurance policies issued by the Second Applicant. In each case, the orders did not require the summary to be sent to policyholders or policyowners for whom the Applicants have no record of a current contact address and/or whose policy lapsed, was cancelled or not renewed prior to 1 March 2022 and in respect of which there are no open claims. Those orders have been substantially complied with.
70 Active Mail, a direct mail marketing house engaged by St Andrew's, sent the General Insurance Scheme Summary by post on or by 12 June 2024 to policyholders of the First Applicant whose contact details St Andrew's had obtained from its own records or the records of third parties, and excluding policyholders or policyowners for whom the Applicants have no record of a current contact address and/or whose policy lapsed, was cancelled or not renewed prior to 1 March 2022 and in respect of which there are no open claims: Lethbridge Affidavit at [24].
71 Active Mail also sent the Life Insurance Scheme Summary by post on or by 12 June 2024 to policyowners of the Second Applicant whose contact details St Andrew's had obtained from its own records or the records of third parties, and excluding policyowners for whom the Applicants have no record of a current contact address and/or whose policy lapsed, was cancelled or not renewed prior to 1 March 2022 and in respect of which there are no open claims: Lethbridge Affidavit at [24], [46]-[48].
72 In total, Active Mail sent the scheme summary documents, together with the relevant notices of intention, and cover letters to over 40,000 policyholders and policyowners of the First and Second Applicants: Lethbridge Affidavit at [25]-[27], [33]-[34]. This included 3,454 Credicorp policyholders, who fell within the scope of order 3(f) rather than order 3(d): Lethbridge Affidavit at [30.2].
73 In addition:
(a) Bankwest, being one of the third parties listed in Annexure A to the Dispensation Orders, arranged for the General Insurance Scheme Summary and the Life Insurance Scheme Summary to be sent by email on 12 June 2024 to over 11,400 policyholders and policyowners and by post on 12 June 2024 to over 1,800 policyholders and policyowners, whose details were extracted from Bankwest's systems: Lethbridge Affidavit at [42]-[45];
(b) Greenstone Financial Services (GFS), being another of the third parties listed in Annexure A to the Dispensation Orders, sent the Life Insurance Scheme Summary by post to over 5,800 policyowners: Lethbridge Affidavit at [49]-[51].
74 In total:
(a) Over 33,000 individuals, whose details were obtained from St Andrew's "StACS" and Blueprint systems, were sent correspondence notifying them of the General Insurance Scheme and/or Life Insurance Scheme: Lethbridge Affidavit at [52]; and
(b) In addition, a total of over 25,000 individuals, whose details were held on third party systems, were sent correspondence notifying them of the General Insurance Scheme and/or Life Insurance Scheme: Lethbridge Affidavit at [53].
75 As noted above, order 3(d) of the Dispensation Orders required the scheme summaries to be sent to the persons referred to in that order before the date on which the schemes were released for public inspection under order 3(g). The scheme summaries were sent on the same day as the schemes were released for public inspection being 12 June 2024: Lethbridge Affidavit at [34]. The Applicants submit, and I accept, that this partial non-compliance ought not to impede the exercise of the Court's discretion to confirm the General Insurance Scheme or the Life Insurance Scheme, particularly in circumstances where the scheme summaries were made available for public inspection for longer than the required minimum of 15 business days (as to which, see below). In the circumstances, the non-compliance with the time requirement in order 3(d) and paragraph 15 of GPS 410 did not adversely affect the interests of policyholders or policyowners or deprive them of the opportunity to raise any reasonable objection to the schemes.
76 Order 3(e) of the Dispensation Orders required the Applicants, in the event the material required to be sent to policyholders and policyowners is returned undelivered up to and including the confirmation hearing, to the extent reasonably practicable, to follow their returned contact procedure for that policyholder or policyowner, as identified in the First Way Affidavit at [213]-[214].
77 A total of 1,242 "return to sender" letters were received back by St Andrew's from the correspondence sent by Active Mail: Lethbridge Affidavit at [36]. The Applicants caused a search to be undertaken by Active Mail of the "National Change of Address Register" maintained by Australia Post, as a result of which 6 customers were identified as deceased and an alternative postal address was identified for 58 customers. A further 58 customers had email addresses identified and were emailed the correspondence. There are 1,120 return to sender letters in respect of which an alternate address could not be found: Lethbridge Affidavit at [36]-[39].
78 The process followed, as referred to in the Lethbridge Affidavit at [36], does not accord with the returned contact procedure identified in the First Way Affidavit at [214] in one respect, namely the process has not involved attempting to telephone the policyholder or policyowner to request an updated postal address as referred to at [214.2] of the First Way Affidavit. The Applicants submit, and I accept, that their failure to undertake that step ought not cause the Court to withhold approval for the schemes in circumstances where the unresolved "return to sender" communications represent less than 5% of the total number of communications sent out by Active Mail for the Applicants and in view of the other steps taken by the Applicants to publicise the schemes.
79 The public inspection requirements set out at Order 3(g) of the Dispensation Orders, paragraph 16 of GPS 410 and s 191(2)(d) of the Life Insurance Act have been complied with. Ms Caton gives evidence that the scheme documents and actuarial reports referred to in order 3(g) were made available for inspection at the locations approved by APRA and listed in Appendix B to the orders for 18 weekdays from 12 June to 5 July 2024: Caton Affidavit at [8]. That was more than the minimum period of 15 days specified in order 3(g). Ms Caton also gives evidence that no one attended any of the inspection sites to view the scheme documents: Caton Affidavit at [12].
80 The requirement in order 3(h) for the St Andrew's Head Office contact number to be utilised to handle calls about the Schemes was complied with. Mr Lethbridge gives evidence that as at 22 July 2024, St Andrew's Head Office had received 868 calls to that number in respect of the General Insurance Scheme and Life Insurance Scheme. The questions asked by callers were of a general nature with respect to the schemes and also questions were raised in respect to individual's policies: Lethbridge Affidavit at [61]-[62]. Mr Lethbridge gives further evidence that GFS received 109 calls in relation to the Life Insurance Scheme: Lethbridge Affidavit at [65].
81 Section 17C(4) of the Insurance Act provides that an affected policyholder is entitled, on the person's request, to be provided by the company with one copy of the scheme free of charge. Section 191(4) of the Life Insurance Act is to similar effect. Order 3(i) of the Dispensation Orders imposes a similar requirement. 13 requests have been received for the scheme documents, in response to which copies were sent out by post to the persons who requested them: Lethbridge Affidavit at [68].