JLT defends council program over class action threat
JLT has defended its track record providing insurance for councils through mutual schemes, as a law firm continues to call for councils to sign up for a class action.
“Every scheme produces an audited set of accounts that clearly define the significant surpluses sitting in those schemes for the benefit of members,” JLT Global Head Public Sector Leo Demer told insuranceNEWS.com.au.
“Mutual schemes were created because councils in Australia could not buy any cover in the open market. The suggestion that councils have paid excessive premiums is unsupported by the facts.”
JLT provides insurance services to more than 500 councils across Australia.
As reported in a Breaking News bulletin last week, law firm Quinn Emanuel Urquhart & Sullivan (QE) says investigations into a class action over the services and level of premiums paid by councils are well advanced, with litigation funder Harbour Fund willing to provide financing if a case proceeds.
The firm says it is already acting for Mornington Peninsula Shire Council, which last year took Federal Court action to gain access to documents.
QE Managing Partner Michael Mills says “a number of local councils” have made substantial savings on premiums since leaving the JLT-administered mutual schemes.
But Mr Demer says of the 54 councils going to public tender or obtaining other quotes during the renewal season last June, only four changed their cover, while 50 continued to receive insurance through the schemes at rates lower than the alternatives.
Last week the Australian Financial Review said the City of Ballarat made more than $600,000 in savings after putting its insurance out to tender in 2014. The assertion was repeated verbatim in a bulletin published the same day by a competitor publication to insuranceNEWS.com.au.
insuranceNEWS.com.au understands this allegation was made by one person two years ago and was found at that time to be inaccurate.
A council spokesman confirmed to insuranceNEWS.com.au today that the $600,000 figure is not accurate, and the council still uses JLT.
Mr Demer says last year four councils that left a mutual scheme in one state returned to it a few weeks before the renewal date “because the broker providing the lower terms could not actually place the insurance at the premiums it offered”.
QE has invited councils to register their interest if they were advised by JLT on insurance, or were members of schemes from June 30 2006.
Mr Mills told insuranceNEWS.com.au there has been a “high level” of preliminary interest from councils and a decision on whether to proceed is likely soon.