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Home / New Zealand

How the crisis unfolded

22 Jan, 2002 12:05 PM2 mins to read

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March 2001: The High Court allows Southern Cross to make a full takeover of Aetna Health and its Diamond computer system. Work begins on the changeover.

July-October: Southern Cross members begin experiencing problems and delays with claims.

November: At the height of the changeover, Southern Cross makes virtually its whole claims department
redundant by moving the claims centre from Auckland to Hamilton. Chief executive Roger Bowie later says this has no effect as staff needed to be retrained on the new system anyway.

December 14: Southern Cross admits it is up to six weeks behind in paying claims. Mr Bowie apologises and says waiting times should be back to normal by the end of January.

December 21: The Court of Appeal upholds the High Court's decision that the Southern Cross takeover of Aetna can go ahead.

Christmas-New Year: Private hospitals, which are owed millions of dollars, try unsuccessfully to contact Southern Cross to find out when they will be paid.

January 9: Private Hospital Association executive director Lesley Clarke says hospitals might make Southern Cross policyholders pay up front if delays continue.

January 11: Board chairman Dr Hylton LeGrice says the delays are "a small hiccup" and a nuisance but not of great concern to the board.

January 16: Mr Bowie writes to the Herald assuring readers that Southern Cross is financially secure and can pay the claims.

January 17: Rival insurer Sovereign reveals ad campaign promising to pay pre-approved claims within 48 hours.

January 18: Southern Cross extends its own deadline for resolving the problem to the end of next month. Mr Bowie defends computer system but says the company did not provide enough staff or training. Asked who was to blame, he says: "I'm responsible."

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