The Senate will proceed with an investigation into the sale of the Territory Insurance Office (TIO), despite the NT Government approving the $424 million deal last Tuesday.

The territory is selling TIO’s insurance operation to Allianz for $230 million and the banking arm to People’s Choice Credit Union, effective on January 2.

The legislation passed by 13 votes to 11 in a late-night sitting, with the Country Liberal Party using its majority.

Chief Minister Adam Giles told ABC Radio Darwin that Allianz has no contractual obligation to maintain premiums at current prices, but flood cover is mandatory across every policy.

He says TIO has to spend 30% of premium on reinsurance, while Allianz can buy reinsurance for 6-8%.

The government-owned insurer earned gross written premium (GWP) of $128.69 million last financial year and paid $49.71 million for reinsurance, or about 38% of GWP.

TIO has put a question-and-answer page on its website to assure customers it will be business as usual, with accounts and policies unchanged.

The Senate Economics References Committee will continue its review of the sale, as part of an inquiry into the privatisation of government-owned assets.

Labor senator Sam Dastyari, the committee chairman, wants to let Territorians express their concerns about the sale, which was conducted “in needless haste and without public consultation”, his spokesman told insuranceNEWS.com.au.

NT Labor senator Nova Peris has also condemned the sale, telling the Senate territory residents fear a Queensland-style insurance crisis.

“Selling TIO means premiums will go up and less protection will be provided,” she said.

“I am sure that to people down south it will seem strange that Territorians have a deep affection for an insurance company. But these things are important when you live in cyclone country.”