We aim to provide a seamless experience for our claimants. Insolvency practitioners are crucial to achieving this goal. They can improve the claims process by supplying information about insolvent firms.
The role of liquidators and administrators in the claims process
The Australian Financial Complaints Authority (AFCA) handles cases of financial misconduct.
As part of the resolution, they contact insolvency practitioners to see if there are any monies that can be available to pay compensation. The consumer is considered an unsecured creditor and can lodge a proof of debt as part of the insolvency process.
If the insolvency practitioner doesn't pay a determination, consumers can lodge a claim with CSLR.
Once a claim is received, CSLR is required by law to confirm that any payment made will indeed be the last resort for compensation. We may seek information from the insolvency practitioner to confirm this.
Claims must fall under the CSLR legislation to be eligible.
We may ask the insolvency practitioner for information, including:
- details about the insolvent financial firm
- payments to debtors.
Insolvency practitioners must provide information and documentation requested within specified time frames under the CSLR legislation.
Subrogation
After we pay a claim, we may also seek to recover the amount from the insolvency practitioner. As part of our claims process, claimants subrogate their rights to recover the amount of the compensation paid to CSLR. CSLR may also seek to recover this amount from the insolvency practitioner.
Are there penalties for non-compliance?
Insolvency practitioners must provide the requested information within a specified time frame.
Non-compliance is a strict-liability offence and carries financial penalties.
We welcome collaboration with insolvency practitioners. Contact us at any stage of our claims handling process if you have queries or require additional support.
