DUBBO Regional 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.
The class action was filed this week 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 council has saved around $230,000 a year on insurance since leaving JLT while Mid-Western saved around $300,000 on the first year alone.
Dubbo Regional Council has been a member of Statewide Mutual for the past two years.
A council spokeswoman, however, confirmed on Friday that council would not be joining the class action against JLT.
“The former Dubbo City Council and Wellington Council were also members of Statewide Mutual for many years,” she said.
Despite the long relationship with Statewide Mutual and JLT, the Dubbo Regional Council spokeswoman said it did not believe they had paid too much for insurance premiums.
Law firm Quinn Emanuel Urquhart and Sullivan (QE) this week lodged the class action on behalf of all local 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 or 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.
The Dubbo council spokeswoman said while council had no current plans to join the class action, it would look elsewhere when its current insurance policy ended.
“Council will be calling for public tenders for its insurances in early 2019 for the 2019/2020 year to assess the commercial competitiveness of being a member of the mutual,” she said.
Bathurst, Cabonne and Cowra have confirmed to Fairfax Media that they will also not be joining the class action.
Other Central West councils were contacted but did not provide a response.
More information is available on the JLT Local Council Class Action website.
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