Some insurers aren’t going to be around after June 30, according to APRA. Its new prudential standards are widely expected to wipe out an unknown number of smaller insurers. But how can brokers be sure the insurer they’re negotiating cover with right now will be around after July 1?

NIBA CEO Noel Pettersen said he has been informed by APRA that it won’t be possible to let brokers know in advance, but that “companies likely to be put into run-off are well aware of that prospect”.

Mr Pettersen said he wrote to APRA CEO Graeme Thompson seeking clarification of the situation. “Under the new regulatory procedures that come into effect on July 1, existing general insurance companies will be required to be authorised under the new scheme,” he said. “NIBA is concerned that to date there has been no indication from APRA as to which of the current general insurers will not be authorised under the new arrangements.”

But Mr Thompson said APRA’s re-authorisation process is still in progress, “and the outcome for some companies has still not been finalised”. The information won’t be available until June 28 at the earliest.

“We have been in close contact with each general insurer about the status of its re-authorisation, for several months or more,” Mr Thompson said. “[We] have put companies clearly on notice where serious prudential concerns remain unresolved.

“Therefore, virtually all companies should be in a position to advise [NIBA] members of the likely outcome of their application for re-authorisation.”

That word “virtually” is the crucial one…