The financial security arrangements smaller authorised representative (ARs) groups have with insurers are being questioned following the collapse of Perth-based Winley Insurance Group.

The departure of Winley’s ARs to other groups over the past two weeks has angered some insurers, who stand to lose millions from the collapse of the company after its broker trust fund was allegedly accessed by two directors who have since left the country.

Winley management’s failure to formally tell insurers of the company’s collapse, and the loss of millions of dollars in premium money held in the trust fund, has been heavily criticised by insurers.

Some insurers only learned about the collapse of Winley from insuranceNEWS.com.au last Monday. 

Now Allianz Australia is planning to more thoroughly scrutinise the records of Winley ARs who have moved on to other groups. It says it “will not be automatically endorsing” requests to appoint former Winley ARs to other AR groups.

“In accordance with its authorised representative appointment procedures, Allianz reserves its right to conduct appropriate due diligence on each AR that seeks to distribute Allianz products through an alternate broker or broker network,” the company said in a statement widely circulated through the industry.

“Allianz remains committed to our broker partners and we will work very closely with anyone that decides to provide authority to former Winley ARs.

“However, because of the current circumstances and lack of clear information about insurers’ exposure, we will exercise caution when committing to transact with former Winley ARs.”

Allianz says it “has not received any official notification from ASIC or Winley with respect to the current state of Winley’s operations”.

insuranceNEWS.com.au understands that most former Winley ARs, including Jeff Bailey, the MD of the failed company, have already joined other licensed organisations.

See ANALYSIS