Brokers can expect “business as usual”, now that a deposit bond provider is re-entering the market.
Deposit Power was forced to cease trading after CBL Insurance went into interim liquidation in February 2018.
Deposit Power acted as an authorised manager and agent of CBL Insurance, which provided all the deposit guarantee bond products sold by Deposit Power in Australia.
The deposit guarantee company had offered products assisting Australian borrowers and investors to buy residential and commercial properties without the need to provide a cash deposit.
In making its return, the company is now backed by international bonding and commercial insurance provider, Lombard Insurance Company who has provided underwriting capacity to the Australian market for more than ten years.
Grant Bailey, general manager, Deposit Power, said, “CBL’s liquidation has been highly disruptive for all concerned. We extend our sincere apologies to those impacted and are actively committed to helping support affected customers.
“We’re now focussed on re-engaging with our long-standing partners and the general broking community to reinstate our position as Australia’s leading supplier of deposit bonds. We’ve also implemented some key initiatives to mitigate future risk and strengthen the product offering.”
As such, an independent custodial fund with Perpetual Corporate Trust Limited (Perpetual) has been established to ensure a reliable and expedient claim payment process.
Deposit Power will receive and process all claims and instruct Perpetual to process claim payments locally.
In addition, a majority reinsurance facility (80%) with S&P ‘A’/ ‘AA’ rated global reinsurance companies has been created.
Bailey said, “These two measures are a powerful combination that significantly reduces customer exposure.”
Deposit Power has retained the same online application and approval system, with the issuance of guarantees electronically in real-time to authorised users.
The fee structure and qualification criteria will also remain the same, as will the multi-level broker
training programs, complete back-end support and direct access to assessors.
Bailey said, “We’ve been very fortunate to retain many of our long-standing team members, including assessors, operations and broker support BDMs – so brokers can expect to continue ‘business as usual’ with familiar systems, faces and processes.”