Chartis Insurance, an international insurance group based in the U.S., has announced that it will be canceling the death and disability insurance policies of some 3,000 Australian soldiers serving in Afghanistan. The move is spurred by a shrinking insurance pool and a high rate of cancellations and payouts on claims. The company, which is a subsidiary of AIG, claims that the cancellations were necessary in order to continue providing benefits for holders of health policies. The problem, however, is that the Australian government is now left to handle the cost of these policies without assistance.
Last year, Chartis was the recipient of a $2.1 million grant from the Australian government. The money was meant to ensure that the company would continue to honor the insurance policies of soldiers until August of this year. The time would have allows the government to find an alternative company and transfer the policies over to a new insurance provider.
Now the government will have to figure out how to recoup its losses from the grant. The cost of the deal will trickle down to taxpayers, who have already had trouble dealing with both foreign and domestic insurance companies in the past. Some Australian residents are not bothered by the issue, claiming that the government should take responsibility of the nation’s soldiers. Others, however, claim that the deal meant that Chartis would be honoring policies until August, and backing out of the deal is a dubious move from an insurance company.
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