Insurance regulatory updates

Hong Kong

Insurance Authority releases consultation conclusions on codes of conduct for licensed insurance agents and licensed insurance brokers

Insurance Authority releases provisional statistics of Hong Kong insurance industry in the first half of 2019

Australia

ASIC action leads to Allianz refunding over $8 million in consumer credit insurance premiums and fees

ASIC has released its Corporate Plan 2019-20 to 2022-23 which sets out its change agenda and regulatory priorities.

Insurance cases

XL Insurance Co SE v BNY Trust Company of Australia Limited [2019] NSWCA 215 – 2 August 2019 – NSW Supreme Court of Appeal – A property valuer’s PI policy contained an exclusion for valuations given to lenders that were not “Authorised Deposit Taking Institutions” (ADIs) unless the valuation contained a “prudent lender” clause.  At first instance it was held that the exclusion only applied where there was a causal connection between the loss and the absence of the prudent lender clause by reason of the introductory words: “directly or indirectly arising out of, based upon, attributable to or in consequence of“. This finding was overturned by the Court of Appeal  – after discussing the principles of construction of commercial contracts – it was held the introductory words require that there be some causal connection between the “Loss” the subject of the claim for indemnity and the specified matters, but the required nexus is less than a direct or proximate relationship as required by the words “caused by”. Further, the subject matter of this exclusion was valuations undertaken for lenders who were not an ADI. Importantly, the subject matter of this exclusion was not defined by reference to any quality or characteristic of an error or omission by the Insured.

Re Prudential Assurance Co Ltd, [2019] EWHC 2245 (Ch) – 16 August 2019 – English High Court – Part VII transfer of large annuity portfolio application rejected.  It was held that factors that weighed against exercising discretion in favour of the transfer were (i) the transferee company was a relatively new entrant into the market without the same capital management or the backing of a large group and a reputational imperative to support a company that carries its business name and (ii) that reliance would be placed upon uncertain capital raising by the transferee was a material disadvantage to the policyholders; and (iii) Prudential’s commercial purpose for the transaction was entirely driven by a need to release regulatory capital to support a proposed demerger.

Wei Linghui v Hong Kong Federation of Insurers Insurance Agents Registration Board [2019] HKCFI 2094 – An application for judicial review of a decision by the Hong Kong Federation of Insurers Appeal Tribunal was successful. The Tribunal had decided, in application by an individual to be registered as an insurance agent, that a graduation certificate issued by a Chinese university was not authentic. The Court found the reasons given by the Tribunal were inadequate, and remitted the matter back to the Board for fresh consideration in accordance with the judgment. 

Insurance articles / news

Chubb reports on emerging cyber risks in the US

Singapore life insurers refine critical illness definitions

20 insurers in China issued rectification notices

AIA to place Brunei business under Singapore arm

Aon Reinsurance Solutions creates global life and health group

India: New chairman of GIC Re selected, pending Cabinet approval

AXA inches closer to full ownership of Chinese joint venture

Prudential Singapore raises coverage age for corporate policies

*Hong Kong, Singapore, China, Malaysia, Vietnam, Thailand and Australia.