QBE Insurance has entered into a scheme of arrangement with Realcover to take over the company’s insurance contracts and insurance liabilities.

The transfer of the business, which provides professional indemnity insurance to the real estate industry, is set for June 30 but is subject to approval from the Federal Court of Australia.

Realcover has been in run-off since June 30 2017.

“Since that time, Realcover has been managing its portfolio of existing insurance business, including handling claims,” QBE said in a statement last week.

“However, due to ongoing costs and the time it will take to run off the portfolio completely, Realcover has entered into an arrangement to transfer Realcover's portfolio to QBE Insurance under the Insurance Act 1973, which enables insurance business to be transferred by way of a scheme.”

QBE is making an application for confirmation of the scheme, which has been scheduled for a June 26 hearing in Sydney.

According to the scheme of arrangement, QBE will indemnify Realcover against all future claims, losses, liabilities, costs and expenses that might arise in connection with the business.

Existing policyholders will continue to have the same rights and obligations when QBE is approved to take over the business.