Discretionary Trusts & Mutuals

Insurance

Payment of the agreed policy premium is made at the commencement of the policy period. The policy coverage is stipulated in the agreed policy schedule and wording. In the event of an insured claim under the policy, the insurer will indemnify you up to the agreed policy sums insured and in line with the policy coverage outlined in the policy wording.

There is no return of funds from the insurer at the end of the policy period regardless of whether you have claimed under the policy.

Trust

Payment of an agreed contribution is made at the commencement of the Trust period. Part of this contribution is held in Trust and used to make payments to meet claims. Part of this contribution is also used to purchase insurance to fully protect members in the event the Trust Funds are either fully eroded by claims during the Trust period, or if a claim exceeds the agreed Single Event Limit.

Claims payments from the Trust are made by the Trustee on a discretionary basis for the benefit of the Trust Members. A claim that goes through to the Insurer will be considered in conjunction with the agreed policy schedule and wording.

At the end of the Trust period, any monies leftover are used for the benefit of the Trust Members and not retained by the Insurer as profit.

The Trust purchases insurance to sit over the top of the Trust’s limits. Your broker can provide a standard Certificate of Currency on broker or insurer letterhead for you to provide to your financier.

Not specifically. Your broker and the Trust office will work with your organisation to determine if the Trust is a suitable and viable model based on a number of factors including potential financial benefit, flexibility and responsiveness.
 

The Trust can be used for any type of insurance where there is no legal act in place that restricts who can provide cover.
Additionally, as the Trust is discretionary in nature, it can consider other risks faced that may not be covered by traditional insurance policies.

There does need to be an appropriate scale opportunity for a Trust. There is no simple rule here, however, generally, there would need to be a premium pool exceeding $200,000. This will be heavily dependent on the risk profile and exposure. 

We would suggest speaking with our team who can provide further advice and insight into this.

When you have a loss, you can either contact your Howden broker or your designated Trust Claims Manager at [email protected] or via our hotline: 1300 904 506.
If the claim is below your individual excess level, then there are no grounds for claims lodgement and you will need to pay the amount of the loss. If the claims are above the excess, the Trust will pay up to its limits with the insurance policy covering the component of the loss above this.

The Howden team will coordinate and advocate on your behalf in the event of a claim.

Any claim that falls outside the relevant policy wording is referred to the Trustee for consideration. Each claim is considered on its individual merit and within the spirit of the policy wording.
 

Yes. The Trustee (Alternative Risk Management Services Pty Ltd) holds an Australian Financial Services License with ASIC (License Number 530893).

To establish the Trust, there is a $15,000 fee that includes external costs and these can be incorporated into the initial year’s costs.

The costs of operating a Trust vary depending on a number of factors including the volume of claims. At the very early stages of the process of investigating the Trust option, we will be able to estimate these costs.

While we are not able to provide individual tax advice, we can confirm that if you are able to claim a tax deduction for traditional insurance, you should be able to claim a tax deduction for the Trust contributions.

We generally suggest a minimum of three (3) months from data collection. The more complex the proposal or niche the insurer appetite and capacity for a specific risk, the more time may be needed.

We will be able to give you a more accurate indication once we have some initial details on what you are looking to cover. Our team is always available to discuss this.

Our team are the most experienced Trust team in the market. Please do feel free to call us at any time for a discussion - our detail are below.