Australian firm Catholic Church Insurance (CCI) has announced that it will begin winding down its operations after failing to secure additional financial support.
On Monday, the CCI informed shareholders and staff of the decision, which will result in the closure of the insurer for new business.
Despite this decision, CCI remains solvent and will honour existing claims, including those related to historic sex abuse cases.
The church leadership has assured victims that the gradual shutdown will not affect their claims. The board of CCI described the process as a voluntary “run-off.”
Repercussions for Catholic dioceses
The insurer’s demise is expected to have repercussions for Catholic dioceses across Australia. Nonetheless, officials emphasise that existing claims will continue to be funded.
CCI’s shareholders, who are Australian dioceses, had considered injecting additional capital into the insurer after providing $170 million previously to cover sex abuse claims.
However, the CCI board stated that it could not secure the necessary capital to sustain its operations and meet regulatory requirements.
Although CCI will remain an authorised insurer under the Australian Prudential Regulatory Authority, it will no longer issue new or renewal policies.
The insurer has offered affected policyholders with contracts expiring in the coming weeks a short-term renewal until June 30.
Joan Fitzpatrick, Chair of CCI, reassured stakeholders that the insurer possesses sufficient assets to meet its current commitments.
“The CCI board and management deeply regret that it has been necessary to make this decision and would like to assure all staff, policyholders and suppliers that it has sufficient assets to meet its commitments as they currently stand,” Fitzpatrick said.
Historic sex abuse claims
The financial struggles of CCI have been attributed primarily to the large number of historic sex abuse claims. However, the insurer has also faced payouts for climate-related issues affecting its customers.
Timothy Costelloe, President of the Catholic Bishops Conference, and Peter Jones, President of Catholic Religious Australia, have expressed their support for abuse victims and reiterated their commitment to justice and compassion.
The pair acknowledged the need for compensation and pledged to continue working towards healing and justice for the crimes and sins that have occurred within the church.
Sources
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