HILLTOPS Council will not be joining a class action by other Central West councils who are attempting to recoup millions of dollars due to alleged excessive insurance premiums.
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The class action was recently filed against multinational insurance broker Jardine Lloyd Thompson (JLT) who was acting on behalf of many of the state’s 128 local councils through Statewide Mutual.
Some councils, including Orange, Parkes and Mid-Western, have joined the class action and claim that since leaving JLT they have saved hundreds of thousands of dollars each year in insurance costs.
Parkes Shire Council saved around $230,000 a year on insurance since leaving JLT while Mid-Western saved around $300,000 on the first year alone.
A Hilltops Council spokeswoman confirmed that they were aware of the class action, but were not taking part.
“Hilltops Council makes no comment about the class actions by other councils, this is a matter for the individual councils concerned,” she said.
Council believes this membership offers competitive premiums across a range of other products and services.
- Hilltops Council spokeswoman
The spokeswoman said Hilltops, along with all former councils, had been a member of Statewide Mutual for a number of years.
“Council believes this membership offers competitive premiums across a range of other products and services,” she said.
“We have no reason to believe that these are not the most competitive rates available.”
Law firm Quinn Emanuel Urquhart and Sullivan (QE) lodged the class action on behalf of all local NSW councils and managing partner Michael Mills said many of them were still with Statewide Mutual.
“They’ve been overpaying for many years,” he said of the mutual’s member councils.
Mr Mills said it was not uncommon for large corporations and businesses to seek out a broker to secure competitively-priced insurance policies due to the complex nature of the premiums needed.
He alleges that JLT did not “shop around” for better priced insurance policies for councils and that it may have had a “conflict of interest” in selecting higher cost premiums that led to commissions for JLT.
Mid-Western Regional Council director community Simon Jones confirmed on Friday that they had joined the class action against JLT.
“In 2016, Mid-Western Regional Council began the process of tendering for its insurance brokerage services,” he said.
“This resulted in savings of around 30 per cent on the insurance premiums that we had been paying previously.
“It is estimated that there was a saving of around $300,000 for the first year alone as a result of going through the tender process, leaving Statewide Mutual and changing brokers.
“Mid-Western believes we may have been overpaying for insurance premiums for many years based on the advice of JLT.”
Bathurst, Cabonne, Cowra and Dubbo councils confirmed to Fairfax Media that they would not join the class action.
More information is available on the JLT Local Council Class Action website.