Rural & General just won’t give up. Last week the Sydney-based company called Rural & General Insurance Brokers fired off yet another shot across the formidable bows of the Australian Prudential Regulation Authority (APRA), challenging it to name the laws which the regulator wants to use to restrict R&G’s activities.

Titled “an olive branch to APRA”, the missive is anything but conciliatory. The company is suing APRA, so it’s worth taking a look at how all this developed.

Rural & General was an Australian insurer which lost its licence in the great APRA purge of small companies last year. In the early 1990s the company featured in an ABC Four Corners documentary which made some hefty allegations about some of its practices over claims. R&G also held the distinction of being the only insurer ever “named” by Insurance Enquiries & Complaints in its annual report for non-compliance (R&G moved out of personal lines, thereby avoiding the classes of business that IEC covered). 

After R&G lost its licence last year – but only after an impressive struggle – a company named Rural & General International Insurance was formed in Vanuatu. At the same time, a Sydney brokerage, Rural & General Insurance Brokers, began directing business to the Port Vila-based insurer.

On April 15 APRA issued a consumer alert on its website, warning consumers not to buy policies from R&GII because of its status as an unauthorised foreign insurer and the fact that the company is an exempt general insurer in Vanuatu. APRA said it is “not authorised to insure any risks within Vanuatu or to solicit insurance business from the public within or beyond Vanuatu”.

APRA has concerns about insurers in a range of Third World countries, including Vanuatu, where it alleges the regulations aren’t all they should be. It would love to ban all unauthorised foreign insurers, but as local insurers continue to shy away from most high-risk business, its hands are tied.

R&GIB has reacted to the APRA alert by taking action in the District Court, seeking damages for “detrimentally affecting the business of R&GIB”.

In a media release, the company – there was no spokesman quoted, and former MD Charles Pratten has said nothing publicly since his company’s licence was cancelled – said the information in the APRA media release is incorrect and damaging to its reputation.

The “olive branch” message asks why consumers should be prevented from purchasing policies written by R&GIB when there is no law preventing the use of unauthorised foreign insurers. It says R&GIB has been “singled out”, and that the brokerage “is exactly the same as the business of many brokers and agents”.

Meanwhile, business is being conducted as usual, says R&GIB.  

APRA is obviously less than impressed, but its Head of Public Affairs, Susan Morey, said yesterday it would be inappropriate to comment given the matter is currently subject to a legal action.