Integrity Life Retail Book Moving to AIA Australia

Integrity Life has entered into an arrangement that will see the vast majority of its retail life insurance book transfer to AIA Australia.

The arrangement, which remains subject to final approval from the Federal Court later this week, will see all ‘Integrity’s Here for You’ life policies transferred to AIA Australia with effect from 1 March 2025.

AIAA will also take over Integrity Life risk policies originally issued by CUNA Mutual Insurance Society under its former ‘MemberCare’ risk product range.

A scheme summary document released in mid-December advises the terms and conditions applying to transferring Integrity Life policies will be replaced by those applying to AIA Australia’s Priority Protection product range.

The statement, which is intended for impacted policy owners, notes AIAA’s Priority Protection range represents what is described as a comparable product to the transferring Integrity Life policies. It says: “AIAA and ILAL have sought to minimise the extent of the changes to the cover provided by carefully mapping the existing insurance benefits of your policy to AIAA’s “Priority Protection” insurance benefits.”

Premium increases

The statement also confirms policy holders will experience premium increases for the majority of transferring policies, with the increases set to apply from the next billing date that falls due after the scheme takes effect.

One of the actuarial impact statements included in the scheme summary notes the arrangement is in the interests of Integrity Life policy owners as a whole due to a combination of factors including:

• Without the proposed scheme, Integrity Life’s policy owners are expected to otherwise lose cover by February 2028 and the insurer’s capacity to meet policy owner benefits in full would be exhausted
• The premium rate increases that most transferring policy owners would face over the next two years with Integrity Life are expected to be greater than the prospective premium increases under AIAA
• The only viable approach to the proposed scheme is to amend Integrity Life’s policies to the terms and conditions of AIAA’s products and to apply AIAA’s premium rates
• There are likely to be some policy owners who, if they applied to another insurer for the same or similar cover they have with Integrity Life, would be declined cover entirely, be provided cover but with additional exclusions and/or with a higher underwriting loading. These policy owners are better off under the proposed scheme as cover will continue with AIAA, whereas they will lose this cover should the proposed scheme not proceed.
• Transferring policy owners who are currently on claim or who claim in the future are better off under the proposed scheme because under the proposed scheme the financial security of their benefits is greater.

The application for final approval of the transfer scheme is set to be heard in the NSW Federal Court this Thursday 13 February.

Advisers can click here to access the Scheme Summary document released by Integrity Life detailing the nature of the transfer proposition.