Underwriting agency Dexta has lost its Victorian Government reinsurance support for its builders’ warranty business in the state. According to media reports today, the Government has decided to withdraw from its reinsurance arrangement with Dexta and its underwriter Allianz when the deal expires on September 30.

That will force 4500 builders insured by Dexta to switch to the other two insurers in the Victorian builders’ warranty market, Royal & SunAlliance and Reward. The Government will cover the builders for an additional three months under the same terms as they had with Dexta.

The challenge now will be to switch 4500 policies before the end of the month – a requirement that might go more smoothly once the Government tells Dexta what’s happening.