Help Available for Clients Affected by Rural and General Insurance Brokers (RGIB) Closure due to ASIC Breach.

The sudden forced closure of Rural and General Insurance Brokers (RGIB) by ASIC, has impacted thousands of Australians, as they are left unable to contact their broker with all contact details and websites for Rural and General Insurance Brokers (RGIB) now closed (2nd November 2016).

Insurance HQ Pty Ltd is here to assist those clients devastated by the closure, and can assist at no cost with:

  • Managing your existing policies to ensure your cover remain in force.  This could potentially save you from double purchasing insurance.
  • Amend your existing policies to meet your changing needs and issue certificates and other documents as required for financier and contract requirements.
  • Ensure policies are remarketed and renewed as required.
  • Provide claims management and lodgment services should you need assistance with either an existing claim or a new claim.

It is extremely rare for an insurance business to cease trading without having made adequate arrangements to ensure a client’s insurance policies remain in force and are serviced correctly, however in this instance this appears to have been the case with Insurance HQ Pty Ltd having received requests for help from clients in several niche industries in which Rural and General Insurance Brokers (RGIB) and Insurance HQ Pty Ltd operate.

So who Is Insurance HQ Pty Ltd?

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Insurance HQ started as Your Risk Adviser in 2007, but rebranded in July 2016 to better reflect the industry niche brands we operate such as Miners Insurance HQ, Truck Insurance HQ and Gym Insurance HQ to mention a few.

We are part of Australia’s largest general insurance brokerage group (NAS) which is part owned by the IAG group which is one of Australia’s largest insurers.

We have access to over 170 insurers and have specialist brokers who can assist with insurance ranging from home and motor, business property, liability, farm, commercial vehicle, farm and income replacement to name a few.

Importantly we have NEVER had any form of fine, penalty, breach or suspension and have in fact been ranked as one of Australia’s top brokerages by National Adviser Services and Insurance Business Magazine on several occasions.

How Do I Get Insurance HQ To Help Me?

The first step is to contact our office on 1300 815 344, and let us know that you are an Ex Rural and General Insurance Broker (RGIB) customer and need assistance.

We will than send you a very simple single page document which we need signed, which will allow us to obtain access to your existing insurance records with your current insurer(s).  This single page form can be returned by email, fax, post or text and will allow us to assist with your insurance policy and claim managemnet.

Get Back Control of Your Insurance Now. Call 1300 815 344

Why Did Rural and General Insurance Brokers (RGIB) Close?

The simple answer seems to be because they failed to meet the Australian Securities and Investment Commission (ASIC) guidelines to operate an insurance business and this is just the latest time they have been in trouble.  You can read more on the trouble Rural and General Insurance Brokers (RGIB) and its directors have been in over the last 14 years below.

Brokerage license suspended

1 November ’16 (www.insuranceandrisk.com.au)

ASIC has suspended the Australian financial services (AFS) license of Parramatta-based Rural & General Insurance Broking Pty Limited (RGIB) for failing to lodge financial statements, auditor’s reports and auditor’s opinions for the financial years ending 30 June 2014 and 30 June 2015.

This is in breach of both its legal obligations under the Corporations Act and its licence conditions.

Deputy Chair Peter Kell said, ‘Licencees are required to lodge financial statements with ASIC to demonstrate their capacity to provide financial services. Failure to comply with reporting obligations can be an indicator of a poor compliance culture. ASIC won’t hesitate to act against licensees who do not meet these important requirements.’

The annual lodgement of audited accounts is an important part of a licensee demonstrating it has adequate financial resources to provide the services covered by its licence and to conduct its business in compliance with the Corporations Act 2001.

ASIC will continue to contact AFS licensees who have not lodged audited financial statements and take appropriate action if they fail to lodge these statements.

The suspension of RGIB’s licence is part of ASIC’s ongoing efforts to improve standards across the financial services industry.

Earlier this year, ASIC permanently banned the former director of RGIB, Timothy Charles Pratten of New South Wales, from providing financial services and from engaging in credit activities

Rural & General Insurance liquidation nears end

10 December 2012 (www.insurancenews.com.au)

The liquidation of controversial Sydney insurer Rural & General Insurance should be completed by next April, more than 10 years after it went into run-off.

The latest accounts show that at October 24 it had $562,028 in the bank and had paid unsecured creditors a dividend of 10 cents in the dollar last year.

The 38 unsecured creditors are owed $1.64 million and the liquidator, Murray Smith of McGrathNicol, estimates that in future he will have between $387,000 and $452,000 available to pay them.

The Australian Prudential Regulation Authority (APRA) says in its annual report there will be no eligible policyholder shortfall in the liquidation.

In 2002 APRA allowed Rural & General to operate as an insurer in run-off.

The Federal Court appointed Mr Smith as judicial manager to the company in June 2010 on an application from APRA under the Insurance Act. In April last year he was appointed liquidator when the court agreed to an application by him for the insurer to be wound up.

Rural & General is one of two general insurers to have a judicial manager appointed. In his judgement ordering that the appointment Justice Nye Perram said a report by an APRA inspector in May 2010 concluded the company was insolvent and its management dysfunctional.

“Claims had not been paid for substantial periods of time and case estimation was inadequate,” the judge said. “Reinsurance recoveries were not being appropriately pursued.”

He said the problems could partly be traced to the division of duties between Rural & General’s former MD and its administrator, and the company did not comply with most of APRA’s prudential standards.

Justice Perram said there was a possibility the company could turn out to be solvent and a judicial manager could ascertain its true position.

Competent management could also benefit the company and Rural & General should “be given a chance to see what it can do”.

APRA gave Rural & General an exemption from its data collection requirements in 2010 after Mr Smith identified a lack of historical policy records, poorly maintained claims files and under-reserving, poor management and pursuit of reinsurance recoveries, lack of information to support loans and lack of a run-off plan.

Rural & General Insurance is now known as ACN 000 007 492. Its former CEO was Charles Pratten, who is currently awaiting sentencing on charges from the Project Wickenby investigation into international tax evasion.

The strange times of Charles Pratten

4 October 2010 (www.insurancenews.com.au)

The arrest and charging of Charles Pratten in Sydney two weeks ago on tax evasion and threat counts is the latest in a long line of brushes with the authorities for the Sydney insurance executive.

Mr Pratten, 50, and his company Rural & General have over the years been the subject of various investigations by the Australian Prudential Regulation Authority (APRA), the Australian Securities and Investments Commission (ASIC), the Australian Tax Office (ATO) and now the Australian Federal Police.

Today Mr Pratten is free on $500,000 bail, his passport confiscated and reporting to King’s Cross police station three times a week.

He has been charged with seven counts of tax evasion and one of threatening to harm a Commonwealth public official.

Media reports have made a big fuss about his home at Sydney’s prestigious Darling Point, his helicopter and his 13-metre game fishing boat, as well as his rural retreat where he breeds cattle.

But according to evidence presented to the Sydney Central Local Court, Mr Pratten’s salary between 2004 and 2008 was a modest $60,000-$80,000 a year. The house is rented, the boat belongs to a company owned by his accountant, the helicopter belongs to a family trust and the farm belongs to a Vanuatu company that Federal Police say he owns.

Prosecutors allege he sent millions of dollars to Vanuatu from his Sydney-based brokerage, Rural & General Insurance Brokers (RGIB), between 2003 and 2009. They assert the money was disguised as payments to a Vanuatu-based insurance company, but that $5 million was returned to Australia for his use as undeclared income.

They say Mr Pratten has denied having any overseas-sourced income, or owning any companies outside Australia.

His activities have been monitored for the past two years as part of the Project Wickenby investigation into international tax evasion schemes. Mr Pratten is allegedly a client of accountancy firm PKF Vanuatu, which is owned by Robert Agius, who has been awaiting trial in Australia on tax evasion charges since April 2008.

But Mr Pratten’s involvement in the general insurance industry and his brushes with the authorities go back a lot further than two years.

In March 2001, when he was MD of insurance company Rural & General, he was the subject of an enforceable undertaking to ASIC related to more than $1.9 million transferred from the insurer between December 1 1995 and December 31 1998 to another company which he also controlled.

ASIC contended the payments were “to Mr Pratten’s benefit” and weren’t properly recorded. He resigned as MD on December 31 1999.

By 2001, Rural & General had earned the distinction of being the only company ever “named” for non-compliance in the annual report of Insurance Enquiries and Complaints – the predecessor of the Insurance Ombudsman Service – and had featured in a critical ABC Four Corners documentary some years earlier.

In 2002 Rural & General Insurance issued an “offer information statement” to raise $5 million by offering shares in the company to clients. ASIC put an interim stop order on the statement, alleging some information in the statement had “great potential to mislead investors”.

Mr Pratten told us then that ASIC gave him only 29 minutes to obtain legal advice before the stop order was made, but had later apologised. An ASIC director commented: “I’m not sure what we should be apologising for.”

In July 2002, APRA refused Rural & General Insurance reauthorisation under the new Financial Services Reform Act, saying it wasn’t satisfied the company could meet the new prudential standards. The company was wound up in 2004.

By that time a company called Rural & General International Insurance had begun conducting business in Vanuatu, and according to APRA was having insurance business directed to it by a Sydney brokerage named Rural & General Insurance Broking (RGIB). The regulator issued a consumer alert saying that under Vanuatu law the insurance company wasn’t allowed to insure any risks within that country.

In May 2003 the brokerage sued APRA in the Sydney District Court, seeking damages for “detrimentally affecting the business of RGIB”. Two months later the court discontinued the action as “an abuse of process” and ordered costs against the company.

In August 2003 APRA obtained undertakings from the insurance company and the brokerage in relation to allegedly misleading content on a website about the insurer’s ability to operate in Vanuatu without restriction.

At around that time we were told by RGIB that Mr Pratten worked in the company as a broker and in the group’s business development and risk compliance divisions.

In November 2004 the MD of RGIB, Aaron Stephenson, was disqualified from acting as a director or manager of a general insurer, or as a manager/agent of a foreign general insurer. That led to a three-year series of appeals, which were finally abandoned in August 2007. Mr Stephenson continued to work within the company as a broker and as the licensee of the company.

Last year the RGIB name appeared briefly in the news after it was ordered by a Melbourne magistrate to pay a $4000 fine and an estimated $102,000 costs for failing to pay $1550 in fire services levies. Reports quoted the lawyer prosecuting the case as saying the action was “without doubt the most difficult and hard fought” in which he had been involved.

While Mr Pratten has kept a low profile in the troubled affairs of Rural & General over the past few years, prosecutors allege they have evidence linking him to Vanuatu-based insurer Commercial Pacific Insurance, a company that previously went by the name Rural & General International Insurance.

Now, facing serious criminal charges that include an alleged threat to give “a hiding” to the Federal Police officer investigating his case, Mr Pratten faces his toughest court experience yet.

03-241 ASIC obtains court undertakings from Rural & General Insurance Broking and Rural & General International Insurance

Monday 4 August 2003 (www.asic.gov.au)

The Australian Securities and Investments Commission (ASIC) has obtained undertakings from Rural & General Insurance Broking Pty Limited (Broking), and Rural & General International Insurance Ltd (International) in the Federal Court in Sydney, in relation to content on the company’s website.

ASIC commenced proceedings in March 2003, following concerns that the website of Broking, www.ruralandgeneral.com.au (the ‘website’), contained representations which may be misleading and deceptive.

Broking is an Australian-based company that brokers insurance business for International, a company incorporated in Vanuatu. Broking and the website promotes the sale of insurance products underwritten by International to Australian consumers.

ASIC commenced the proceedings because of concerns that these representations may have caused consumers to believe that International was able to operate as an insurer in Vanuatu, without restriction.

As a result of ASIC’s action, Broking has undertaken to permanently remove the representations from the website.

In addition, Broking has agreed to send a corrective notice, in a form acceptable to ASIC, to every person or entity who, through Broking, had purchased an insurance product from International between 23 November 2002 and 31 March 2003 (the period of time during which the material was on the Website), and to publish, or cause to be published, a corrective notice on the website in a form acceptable to ASIC.

International undertook to do all things within its power to cause Broking to comply with the above undertakings.

The undertakings were given by Broking and International without admissions. Both Broking and International agreed to pay ASIC’s costs up to and including 11 June 2003.

‘ASIC has taken this action to ensure that Australian consumers are not misled into believing they are protected under international laws. People should be aware there are some risks involved in placing their insurance with unauthorised foreign insurance companies, and urges all consumers to check whether they are protected in Australia if something goes wrong’, ASIC Deputy Executive Director of Enforcement, Ms Jan Redfern said.

RURAL & GENERAL INSURANCE BROKING

8 Jul 2003 (www.apra.gov.au)

Proceedings brought against the Australian Prudential Regulation Authority (APRA) by Rural & General Insurance Broking Pty Ltd have been discontinued by the judge in the District Court of New South Wales and subpoenas issued by the broker have been set aside as an abuse of process.

 Rural & General Insurance Broking initiated proceedings against APRA in April following the regulator’s warning to Australian consumers about buying insurance policies with Rural & General International Insurance Limited. The company is registered in Vanuatu as an exempt general insurer and is not authorised to carry on insurance business in or from within Vanuatu or to solicit insurance business from the public within or beyond Vanuatu.

 The broker has also been ordered to pay APRA’s costs.

 APRA strongly advises consumers to consult the full list of insurers licensed in Australia and which are subject to Australian laws and regulations at: www.apra.gov.au

Another long chase for the fire brigade

February 13 2009 (www.smh.com.au)

It has been a tough week for Victorian firefighters. Probably the last thing the Melbourne brigade needs is the sort of time-wasting legal case that is due back in the Melbourne Magistrates Court in a fortnight. The wrangle began more than two years ago over the late payment of $1550 in compulsory fire levies owed to the brigade by Rural and General Insurance Brokers (RGIB), an outfit run by Aussie likely lads Aaron Stephenson and Charles Pratten. Last year RGIB was convicted, fined $4000 and ordered to pay costs which the brigade estimate at $102,000. The brigade’s legal eagle, in an affidavit filed with the court, says the case has been “without doubt the most difficult and hard fought” in which he has been involved. At one stage subpoenas were sent out to 55 witnesses.

RGIB was formed after an earlier Pratten and Stephenson firm, Rural and General Insurance, lost its Australian Prudential Regulation Authority (APRA) licence in 2002. Rural and General moved to Vanuatu and was rebranded as Commercial Pacific Insurance. The saga is perhaps not surprising, given the lads’ track record. In 2001 ol’ Charlie was rapped over the knuckles by ASIC for “improper conduct of the business” and “inadequate maintenance of records”. In 2004 APRA disqualified Stephenson from acting as a director or senior manager of an insurance company, alleging he had (among other indiscretions) breached prudential standards. But the boys march on. In his biog on the web Pratten says: “I am passionate about seeing my clients do well.” Stephenson declares: “I believe that looking at overall strategy and becoming personally involved in day-to-day operations of a business is essential.”

Not that this is relevant to Stevo these days: he appealed against his disqualification but, after eight days in court, threw in the towel and resigned.

Permanent ASIC ban for former NSW broker

17 August ’16 (www.insuranceandrisk.com.au)

ASIC has permanently banned the former director of an insurance broking company, Timothy Charles Pratten of New South Wales, from providing financial services and from engaging in credit activities.

Mr Pratten was banned after being convicted on seven counts of dishonestly obtaining a financial advantage from the Commonwealth by deception. This conviction followed an investigation by the Australian Taxation Office, in which it was found that Mr Pratten failed to declare approximately $5 million of income derived by him during financial years ending 2003 to 2009.

On 29 April 2016, Mr Pratten was sentenced to five years jail with a two-year non-parole period. Under the Corporations Act and National Credit Act, ASIC may ban anyone who is convicted of a fraud offence.

Mr Pratten has the right to appeal to the Administrative Appeals Tribunal for review of ASIC’s decision.

As a result of Mr Pratten’s conviction, he is automatically disqualified from managing corporations. He has been removed as a company office-holder of Practical Insurance Claims Administration Pty Limited and Australian financial services licensee, Rural & General Insurance Broking Pty Limited.

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