Have your once-in-a-lifetime say on the reform of New Zealand’s insurance law before it is too late

 

Background

Approximately 20 years ago, the New Zealand Law Commission recommended significant changes to New Zealand’s insurance law. Subsequently, the Commission recommended a wholesale repeal and re-write of the Life Insurance Act 1908. To date, neither has occurred. That is about to change.

In 2010, Parliament comprehensively addressed the regulation of insurers in New Zealand for the first time, by passing the Insurance (Prudential Supervision) Act 2010. Although Parliament has tinkered with insurance law several times during the last century, passing the Insurance Law Reform Acts 1977 and 1985, and the Insurance Intermediaries Act 1994, the English common-law has remained the bedrock of New Zealand’s insurance law up until now. [Read more…]

Should the existence of double insurance be like a game of paper/scissors/rock?

 

Background

Insuring the same risk twice with different insurers is not as silly as it sounds.

In the early days of marine insurance, insureds commonly purchased more than one insurance policy to cover the same risk in order to protect themselves against insurer insolvency. In England, insureds placed the bulk of their marine insurance with individual underwriters through a certain coffee shop called Lloyd’s Coffee House. Those individual underwriters were not subject to any financial controls and insolvencies were common.

Before you dismiss the risk of this happening in New Zealand today, I remind you of AMI and CBL, and of HIH in Australia. In the USA, AIG narrowly avoided insolvency through a government bailout. [Read more…]

Does an insolvency exclusion in a D & O Policy apply when a mining company’s business fails and it becomes insolvent?

 
Background

An Australian mining company based in Perth, Kaboko Mining Limited (Kaboko), conducted the exploration, development and mining of manganese in Zambia. Like all mining adventures, it is a speculative business.

The company borrowed money from a financier, which took security for the loan over the anticipated flow of manganese from the mine.
[Read more…]

Can an insurance broker renege on a proposed underwriting agency relationship after the negotiations with the underwriter are finalised but before a formal agreement is signed?

Entering into a business relationship with another party can be complicated; many issues need to be discussed and agreed to. The parties need to be free to negotiate without commitment until they reach substantial agreement. Once they do, they often engage lawyers to prepare a written contract, which they sign.

What is the position if one of the parties changes its mind before the lawyers agree to the terms of the written contract? Can that party rely on the absence of a signed contract to walk away? [Read more…]

Two recent Australian cases of interest – one overturns a PI claim declinature, the other upholds a PI claim declinature by applying the aggregation clause

Certain Underwriters at Lloyd’s v Aquagenics Pty Limited (in liquidation) (Click here for the decision)

Background

The insured (Aquagenics) was a water treatment-engineering firm. It contracted with a local council to design and build a wastewater treatment plant. It held a design and construct professional indemnity policy with Lloyd’s Syndicates. [Read more…]