The Catholic Church’s private insurer spent more than $58 million paying out victims of child sexual abuse in the 2019-2020 financial year. According to its 2019-2020 annual report, there was a 74% rise in total insurance claims.
These are overwhelming numbers which the insurer can no longer keep up with.
Now, Catholic Church Insurance (CCI) is being forced to raise money and liquidate investments to cover its exposure to future compensation claims worth more than $238 million.
In December 2020, CCI posted a loss of $250 million as it struggled to meet the new claims.
The CCI insures Catholic churches, religious institutions, welfare groups, aged care facilities and Catholic schools for incidences of property damage, loss and injury, and the compensation and legal costs for instances of child sexual abuse within the Catholic Church.
The CCI has been covering these costs since 1969.
Catholic organisations will struggle as CCI cans dividends and charitable distributions
In order to raise capital, the CCI has stopped paying dividends and distributions to Catholic Church organisations who are shareholders in the non-profit sector, cutting off their source of income.
These shareholders include the Australian Episcopal Conference of the Roman Catholic Church, the Archdioceses of Melbourne, Sydney and Brisbane. This also includes the Jesuits, Marist Brothers, De La Salle Brothers and the Sisters of Mercy.
The CCI’s annual report stated “it is not certain that these efforts will be successful” but the capital plan is “doing what it was designed to do”.
In the midst of the Royal Commission, the CCI estimated it would cost $150 million to settle all outstanding and anticipated sexual abuse claims. However, this number has continued to grow every year.
The Chief Executive of the CCI, Robert Scenna, said the nature of the reporting of sexual abuse claims (some now decades old) has made it difficult to assess CCI’s future liability because the payouts could be higher or lower as time goes on.
More news as the story develops.
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