Frequently Asked Questions
Only members of Capricorn Society may apply to join Capricorn Mutual.
After hearing many expressions of dissatisfaction from its members about insurance, the Board of Capricorn Society decided to seek an alternative.
Capricorn Mutual Limited was formed in 2003 to offer a commercially feasible alternative to insurance, exclusively for members of Capricorn Society.
A mutual is an association of people with common risks or goals who pool financial resources to meet common financial obligations. Mutuals have a long and proud history in many countries. Some businesses and organisations have trusted their business risks to the same mutual for over 100 years.
As members of Capricorn Society know, there are significant savings that can be achieved when a group of individuals with common needs and goals come together to use their collective purchasing power. The same principles apply to Capricorn Mutual because it was developed to meet the specific needs of the Capricorn Society members, and it is managed with the sole aim of providing members of the Mutual with the protection they need at an affordable price.
Capricorn Mutual is a discretionary mutual - it is not an insurance company - it offers Capricorn Society members an alternative to insurance. A discretionary mutual is a mutual where a member's entitlements are at the discretion of a person or people appointed by the members. In the case of Capricorn Mutual, the Board of Directors exercises this discretion.
Discretionary mutuals have operated successfully around the world in different forms for many years. Capricorn Mutual is not an insurance company, but a discretionary mutual run solely for the benefit of its members. Capricorn Mutual is a not-for-profit organisation, which means that members are not paying contributions that reflect a profit margin.
The Board of Capricorn Mutual exercises the following discretions:
Who to admit to membership.
What protections to grant and the level of protection to apply.
To accept or reject a claim for assistance made by a member.
To pay in full or in part a claim for assistance made by a member.
The Board's discretion in these matters is absolute and is not limited in any way.
No. Applicants pay a small subscription - currently set at $10 p.a. (+ GST where applicable) to join Capricorn Mutual. If the application is successful, members are invited to apply for protection for different risks. Members select the category of risk according to their personal or business needs. If the application is successful, the member will pay a contribution for each category selected. There is no insurance premium paid by members. Contribution payments commence the member's right to apply for assistance for the selected category of risk.
No, Capricorn Mutual's products are not an insurance policy. Members of Capricorn Mutual receive a Certificate of Membership confirming their membership of the Mutual. The Product Disclosure Statement (PDS) issued when a person is applying for membership of Capricorn Mutual sets out the Rules, Constitution and the Protection Wordings that will apply if a member's application for protection is successful. The PDS is an important legal document that should be read carefully before an application is lodged. If the application for discretionary protection is successful, a member will be issued with a Schedule of Protection that confirms the protections in place and the amounts of discretionary protection available to the member.
Yes, contributions will be charged to your Capricorn Society account, earning you valuable Reward Points with Capricorn Society.
If you choose to pay by instalments, assuming your protection runs for a full year, your contributions will be payable over 11 months, with an initial double instalment, followed by 10 equal monthly instalments. If you miss an instalment payment you may have your protection terminated in accordance with the Rules of Capricorn Mutual.
Members have the right to apply to the Board to request assistance when a claim falls within one of the protections that the member has selected. The Board may at its discretion accept, partly accept or reject applications by members for assistance and payment of the claim.
Capricorn Mutual is not subject to APRA regulation because it is not an insurance company. It is regulated by ASIC. Insurance companies are regulated by the Australian Prudential Regulatory Authority (APRA). Because it is not an insurance company, Capricorn Mutual is not authorised under the Insurance Act 1973 to conduct insurance business, and as such it is not subject to the provisions of the Insurance Act, which establishes the system of financial supervision of general insurers. Capricorn Mutual is regulated as a financial services provider, which is why it has an Australian Financial Services Licence. One of the conditions of that Licence is to always have assets that exceed its liabilities. It is required to provide ASIC with its audited accounts and to report to ASIC if at any time it is unable to meet its licence conditions.
Capricorn Mutual has been granted an Australian Financial Services Licence by the Australian Securities and Investment Commission (ASIC) and is subject to supervision by that regulator.
Capricorn Mutual has appointed Capricorn Mutual Management Pty Limited ACN 129 143 479 (CMM ) to manage its operations. CMM is a corporate authorised representative of Capricorn Mutual and is authorised to provide financial services on its behalf. It is registered with the Australian Securities and Investment Commission as authorised representative No 324456.
CMM will be paid based on annual budget approved by the CML board. Twelve (12) equal monthly instalments will be paid monthly in advance, with the first payment due on the 1 July 2008. The fee paid to CMM may include performance related remuneration relating to the provision of the Services. The Manager may also, depending on performance be paid a bonus fee after 1 July 2009. If paid, the bonus fee will be equivalent to 20% of the reported and audited surplus of CML for the year ending 30 June . The audited surplus is defined as that amount appearing on the Statutory Income Statement as Profit for the year ending 30 June before income tax.
Services include marketing, sales and distribution through the CMM Liaison Officers and staff for the sales and service centre.
Key CMM employees have also been appointed as authorised representatives of Capricorn Mutual and provide financial services on its behalf.
Capricorn Mutual manages its financial requirements in the way that is suitable for the needs of the Mutual and in accordance with Licence Condition 21 of its AFS Licence.