Hot on the heels of last week’s APRA warning about unauthorised foreign insurer Atlantic & Pacific comes another, this time hailing from the Solomon Islands. International Unity Insurance has been selling cover into Australia for up to a year, much of it into the heavy haulage market.

APRA said on Friday that International Unity is no longer registered as an insurer in the Solomon Islands, and has declined to allow APRA to have its capital backing independently verified.

Australasian Transport News, a specialist online newsletter, said International Unity may have written as much as $10 million premium in the heavy haulage market. It works through an Australian agent and has been used by as many as 10 brokers involved in heavy haulage cover.

“You have to be worried when the regulator acts,” the source said. Perhaps, but reliable sources said last night that the company is standing by its guarantee to honour all claims under current contracts. It’s understood International Unity representatives in Australia are contacting brokers who have arranged their policies to reassure them that their Solomon Islands suspension will only be temporary.

What APRA didn’t say is that International Unity is an unlisted public company registered in Australia, with all but one of its four directors living in Melbourne – the other lives in England. The registered company address is in the Melbourne suburb of Wheelers Hill. Its “principal place of business” is far from the balmy heat of the Solomons – it’s the 9^th floor of 30 Collins Street, Melbourne.

International Unity was deregistered by the Solomon Islands’ Office of the Controller of Insurance, possibly as a result of pressure from the Australian Government. Both ASIC and APRA are known to have been concerned for some time at the significant movement of premium dollars to unauthorised foreign insurers.

Some Australian businesses have been unable to secure local cover at reasonable prices – if they could secure cover at all – and have been forced to look elsewhere. Brokers have been alerted several times over the past year to the legal necessity of ensuring their clients know the pitfalls of dealing with insurers in countries where insurance regulation is next to non-existent, and the brokers’ approach is not believed to be an issue with the local regulators.

APRA has advised International Unity Insurance to inform its Australian administrators and brokers not to accept or renew any more contracts of insurance.