Sale of a private health insurance fund
“As our client operated in a highly regulated industry, it was necessary to meet the often competing requirements of APRA, PHIAC and the Federal Court of Australia, as well as those of our client and the purchaser of the health fund.”
Cornwall Stodart
Our Client
Our client is a Friendly Society with
various businesses and products which are offered to its members
Australia-wide. Its businesses included private health insurance,
life insurance, funeral funds, retirement villages and other
investment products.
Their Ambition
Our client sought our advice on the
legal and regulatory processes involved in the sale of the
business, and engaged us to ensure the sale proceeded successfully.
With over 5,000 health fund members, our client wanted to ensure
that members were not adversely affected by the sale. This was a
key criterion in selecting the ultimate purchaser of the health
fund.
Enhancing their Success
The sale of the business was completed successfully within a
tight timeframe and all regulatory requirements were met, including
the approval of APRA, PHIAC, the Federal Court of Australia and the
members of the fund over amendments to the Society's Constitution.
The sale strengthened the financial position of the Friendly
Society and allowed it to focus on introducing new products and
offerings to its members.
Behind the Headlines
As the Friendly Society also offered life insurance products, it
was considered to be a 'jointly regulated friendly society' under
the Life Insurance Act 1995. As a result, in addition to
obtaining PHIAC approval pursuant to the Private Health
Insurance Act 2007, the Friendly Society was required to
obtain the approval of the Federal Court of Australia in accordance
with the Life Insurance Act 1995.
We were involved in all stages of the disposition, from the
initial negotiations through to the transfer of the business. Our
role involved liaising with tax, actuarial and accounting experts,
negotiating and drafting the sale contract, ensuring that all
regulatory requirements were met under the Private Health
Insurance Act 2007 and obtaining PHIAC consent, ensuring that
all regulatory requirements were met under the Life Insurance
Act 1995, preparing the Federal Court application and
representing our client at the Court hearing.
Following the disposition of the health insurance fund, we
advised another private health insurer in an unsolicited offer to
purchase its health insurance business.