The Federal Governments proposed changes to the insolvency framework, which will commence on January 1 if legislation is passed, could result in an unprecedented number of possible claim events for trade credit insurers, Lockton Companies Australia has warned.
The reforms, announced in September by Treasurer Josh Frydenberg, draw on key features from Chapter 11 of the Bankruptcy Code in the US.
Mr Frydenberg says the proposed changes will help more small businesses with liabilities of less than $1 million restructure and survive the economic impact of COVID-19.
Under the proposed reforms, eligible small businesses will be allowed to restructure existing debts while remaining in control of the operations.
There will also be a rapid 20-bu…
Read the full article at: https://www.insurancenews.com.au/regulatory-government/new-insolvency-laws-could-impact-trade-credit-insurance