Southern Cross bands still hitting a sour note

By SIMON HENDERY

A watchdog group representing Southern Cross policyholders vows to keep fighting, despite losing a battle to get the health insurer to back down over the introduction of age bands.

Last year the Southern Cross Members' Society put pressure on the insurer to change a new policy of setting premiums in single-year bands. But in late April, after commissioning an independent PricewaterhouseCoopers opinion on the policy, Southern Cross said it would stick with the decision - and associated premium increases.

The increases helped stem a funding crisis, but the members' society argued they penalised long-serving policyholders.

Society chairman Keith Robinson said while the group did not have the resources to pursue the issue with legal action, it would raise it at the Southern Cross annual meeting in October.

He said the decision of Southern Cross not to back down effectively ignored a resolution at last year's annual meeting to review the premium increases, which was supported by more than 37,000 members.

"We shall certainly not be letting the matter drop. The way in which it was handled was very poor, and that fact has got to be made very clearly to the directors."

The society would continue to press the insurer on its premium increases, and would also lobby the Government and opposition parties on the issue of Government assistance towards the costs of medical insurance.

Robinson said a drop in the number of private insurance policyholders - prompted by moves like Southern Cross' to increase premiums - would lead to an increase in the healthcare burden carried by taxpayers.

The Southern Cross chief financial officer, Terry Moore, said the insurer's board had to take into account the society's views "but at the end of the day they have a different view".

Moore said Southern Cross was finalising its result for the year to the end of June, which would be released in September.

In late April the not-for-profit friendly society, which is owned by its members, said it was on track to produce a moderate surplus to boost reserves. Moore said that was still the case.