The Australian Prudential Regulation Authority (APRA) will monitor the voluntary administration of Eric Insurance Limited (Eric). The voluntary administrators will convene a meeting of Eric’s creditors on September 16, 2025.
This is to allow creditors to vote on a Deed of Company Arrangement (DOCA) proposal as an alternative to Eric being placed into liquidation
Eric, a small general insurer that provided add-on motor vehicle-related products, made the commercial decision to exit the general insurance market in July 2023 and completely ceased writing new insurance policies in June 2024.
Shaun Fraser and Kathy Sozou of McGrathNicol, who were appointed voluntary administrators on July 28, have called the second meeting of creditors. At that meeting, creditors must choose whether Eric should be returned to directors’ control, enter liquidation, or proceed with the proposed DOCA.
APRA launched winding-up proceedings in July 2025, citing policyholder protection concerns. Those proceedings have been adjourned while creditors consider the restructuring alternative.
Under the DOCA proposal, current policyholders would remain covered for valid claims up to 28 days after the deed’s commencement, and would then have three months to lodge claims. After that period, policies convert to claims for unearned premiums. Administrators say modelling shows over 97 per cent of claims are reported within that timeframe.
Crucially, returns to creditors are expected to be significantly higher under the DOCA. Employees and policyholders with admitted insurance claims are forecast to receive 100 cents in the dollar in both scenarios. However, unsecured creditors – including policyholders with unearned premium claims – are expected to recover 45 cents in the dollar under the DOCA, compared with just 25 cents in a liquidation.
The administrators argue the DOCA offers “a superior, more certain and more timely return” than liquidation, which would involve greater costs and delays. They have therefore recommended creditors vote in favour of executing the DOCA.
If creditors approve the DOCA, a committee of inspection of up to five members may also be appointed to oversee the deed’s implementation.
Creditors must submit proofs of debt and, if required, proxy forms by 4:00pm on September 15 to participate in the virtual meeting.
To protect the interests of policyholders, APRA says it has maintained heightened supervision of Eric for some time and explored various exit options with the insurer and the administrators. APRA claims it is closely monitoring Eric’s withdrawal from the insurance industry to achieve the most favourable outcome for policyholders. The administrators can be contacted by email to ericinsurancelimited@mcgrathnicol.com and information about the administration is available from here