jdt concept report
TRANSCRIPT
CONCEPTUAL REPORTTHE JLT DISCRETIONARY TRUST CONCEPT
399,100
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Territories
Employees
Countries
CONCEPTUAL REPORT THE JLT DISCRETIONARY TRUST CONCEPT
JLT OVERVIEWJardine Lloyd Thompson is one of the world’s largest providers of insurance,
reinsurance and employee benefits related advice, brokerage and associated
services. JLT’s client proposition is built upon our deep specialist knowledge,
client advocacy, tailored advice and service excellence. We place our clients
first, champion innovative thinking and expect to be judged on the results
we deliver.
JLT is quoted on the London Stock Exchange and owns offices in 39
territories with more than 9,100 employees. Supported by the JLT
International Network, it offers risk management and employee benefit
solutions in 135 countries.
JLT AUSTRALIAThe JLT Discretionary Trust (JDT) is available exclusively through JLT
Australia and is supported by our specialist claims management arm Echelon.
In Australia we employ more than 800 highly motivated industry professionals
across all states and territories. Our strength is in providing tailored,
innovative solutions for insurance and reinsurance needs of companies and
individuals in Australia.
JLT GROUP SERVICES PTY LTD (JGS)JGS are a wholly owned subsidiary of JLT Australia and act as Trustees and
Scheme Managers for JDT products.
AGILITYRIGOURCOLLABORATION
INTRODUCTION TO JLT
Introduction to JLT
CONCEPTUAL REPORT THE JLT DISCRETIONARY TRUST CONCEPT
WHY CHOOSE A JDT?JLT have been successfully operating the JDT
throughout Australia since 1986, providing clients,
their customers and members with a viable
alternative to buying conventional insurance
protection.
The JDT offers organisations an opportunity to
access an innovative, cost effective protection
vehicle, safeguarding them from risk even in the
most uncertain market and economic conditions:
• Broad ranging cover designed solely for your
industry
• Discretionary Claims Decisions
• Competitive Terms
• Members may share in surplus profits
• Dedicated Claims and Customer Service
Support
• Financially Capped - guaranteed no calls
on members
SECURITY OF FUNDSThe JDT is constructed to meet its members’
requirements, as opposed to them purchasing a
traditional ‘off the shelf’ insurance policy. Instead,
it provides its members with a sophisticated
financial instrument for addressing identified
risk exposures, which has been actuarially
constructed and is professionally managed.
EXECUTIVE SUMMARY
Executive Summary
HOW A JDT WORKSWithout exception, a JDT is always structured to
match the needs of its members. It is designed to
build an initial layer of funds to pay for the majority
of everyday losses. Insurance is then purchased
to protect members for losses in excess of this
layer.
Members of the Trust make contributions held
in a designated bank account for the benefit of
members and managed by the Trustee. The funds
are then utilised to:
• Meet claims
• Purchase insurance protection above the initial
layer
• Cover the costs of establishing, managing and
administering the JDT facility
• Return surplus benefits to members
Surplus profits can be distributed to members in
the form of discounts, or to fund risk management
activities.
The Member is entitled to lodge a claim for any
incident and the Trustee is obliged to consider
that claim, but only up to the scheme cover limits.
Should the scheme limits be exceeded, the
Trustee will refer that component of the claim to
the excess layer Insurer for them to consider in
accordance with the insurance policy wording.
We only utilise Insurers regulated by the Australian
Prudential Regulation Authority (APRA).
PRODUCT OVERVIEW
TYPES OF RISKS In addition to more familiar covers usually seen in
conventional insurance products, a Discretionary
Trust is designed to potentially address exposures
beyond the scope of what is normally available
from the traditional insurance market.
Although the JDT is not insurance, it performs
functions similar to insurance. It manages
predictable working losses and then insurance
cover is arranged for more volatile, unexpected
risks.
CONCEPTUAL REPORT THE JLT DISCRETIONARY TRUST CONCEPT
JDT STRUCTURE
INSURANCE COVERAGE
JDT PAYMENTS
MEMBEREXCESS
Product Overview
JDT – THE KEY FACTSWe work closely with clients and invest the time to
ensure that we fully understand their requirements
and deliver a solution specific to their particular
needs:
• Our financial risk model is subject to an annual
independent actuarial report;
• A JDT is a cash facility and contribution and
premium funding can be organised separately
by JLT;
• The JDT’s liability is limited to the monies held in
the JDT’s bank account;
• The bank account details are declared in our
regularly provided reports and monies held in
that account are at call;
• All JDT’s are fully funded to their claims and
expense projections;
• There are no calls on Members to contribute
additional moneys to the JDT other than for
potential increases in cover;
• Each claim within the scheme limits is accepted
or otherwise at the discretion of the Trustee;
• The Trustee is obliged to consider any matter
referred to it regardless of whether the event
would be covered under the excess layer
insurance;
• The financial operations of the JDT are
independently audited each year;
• The financial audit establishes the level of
surplus monies in the JDT available for
re-distribution;
• JGS is the Trustee and Scheme Manager and is
responsible for controlling the management of
the JDT. This function cannot be performed by
any other party.
CONCEPTUAL REPORT THE JLT DISCRETIONARY TRUST CONCEPT Product Overview
CONCEPTUAL REPORT THE JLT DISCRETIONARY TRUST CONCEPT
LEGAL STATUSAll JDT documentation (the Trust Deed, Scheme
Rules and Product Disclosure Statement) has
been prepared in consultation with the Australian
Prudential Regulation Authority (APRA), the
Australian Securities and Investment Commission
(ASIC) and The Commonwealth Treasury.
• APRA have confirmed that JDT’s do not
constitute Insurance or contravene the
Insurance Act. The Trustee also complies with
the reporting requirements detailed within
the Financial Sector Legislation Amendment
(Discretionary Mutual Funds and Direct
Offshore Foreign Insurers) Act 2007.
• ASIC has issued a relief instrument – Managed
Investment Schemes (Rule 5C). ASIC have
confirmed that JDT’s are not in contravention
of the Corporations Law (Prescribed Interest).
The JDT’s Product Disclosure Statement
documentation has met all ASIC requirements.
• Australian Tax Office reviews have reinforced
that JDT’s are both ABN and Tax compliant
and contributions are not income to the JDT
- the only income is the interest earned, plus
any recoveries made by the JDT.
REGULATORY OVERVIEW
MEMBERS
Member 1
Member 2
Member 4
Member 5
CumulativeSum of Contributions
SCHEME COVER“THE FUND”
INSURANCE COVER
INSURANCE BROKERS
EXTERNAL SERVICE PROVIDERS TO JDT
• Auditors• Actuaries• Legal Advisers• Tax Agent
Member 3 JDTContributions
Paymentfrom Fund to Trustee
PaymentFrom Insurer
to TrusteePremium for XOL
Insurance
Premium for XOL
Fully Funded Scheme Cover
Limited
SPECIALISTS SUPPORTING THE JDTINSURANCE BROKERS Jardine Lloyd Thompson Pty Ltd
CLAIMS MANAGERS Echelon
ACTUARIES Cumpston Sargeant Pty Ltd
AUDITORS BDO Australia
BANKERS National Australia Bank
LEGAL ADVISER Thomson Geer
TAX AGENT BDO Australia
• JLT will liaise with all parties and reach
agreement on the core requirements of the
client and what the Trust is designed to
achieve;
• JGS undertakes risk profiling to gain a detailed
assessment of the risk factors that need to
be considered and the safeguards that are
required;
• JGS builds the Financial Model;
• JLT obtains terms for Excess Layer Insurance
Protection;
• JLT obtains client agreement to proceed;
• JGS supplies Legal Agreements to the client;
• JGS develops, implements and documents
Operational Procedures specific to the
requirements of the particular Trust;
• Management Reporting Requirements are
agreed with all parties.
THE NEXT STEPS
Regulatory Overview
JLT Group Services Pty Ltd ABN 26 004 485 214 AFS License 417 964 Level 3, 148 Frome Street ADELAIDE SA 5000
GPO Box 1693 ADELAIDE SA 5001
All cover is subject to the Trustee’s discretion and/or the relevant policy terms, conditions and exclusions. Any advice in this document is general advice and does not take into account your objectives, financial situation or needs. You should consider the relevant Product Disclosure Statement and your objectives, financial situation or needs before acting on this advice. Please visit www.jlta.com.au or contact JLT Group Services Pty Ltd for the relevant Product Disclosure Statement, or for further information.
JLT Group Services Pty Ltd, ABN 26 004 485 214. AFS License 417 964 www.jlta.com.au A member of the Jardine Lloyd Thompson Group
© August 2014 0874/033
CONTACTS
CRAIG HARMSGeneral Manager
Tel +61 8 8100 3008
Mob +61 409 797 122
GAVIN BROWN Board of Advice
Tel +61 8 9426 0981
Mob +61 419 919 394