Asia-Pacific Insurance Update – 28 June 2019

In these updates, we set out a list of insurance regulatory developments relevant to the Asia-Pacific*, India and UK, recently decided insurance-related case law in Hong Kong, Australia and England and interesting insurance articles from across the world.

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Insurance regulatory updates

Malaysia

• Insurance and takaful aggregators (websites that are used to obtain insurance quotes) will soon be required to registered under the Financial Services Act to carry on their business according to Bank Negara Malaysia, which regulates all insurance entities in the country.

Australia

• The Australian Prudential Regulation Authority (APRA) has released its General Insurance Claims Development Statistics publication for the December 2018 reference period. The publication details trends in claims payments and reserves across the general insurance industry by class of business. The more relevant development statistics cover the long-tail classes of business. 

• APRA has also released a list of frequently asked questions to provide further information to assist regulated entities in the interpretation of Prudential Standard APS 111 Capital Adequacy: Measurement of Capital (APS 111), GPS 112 Capital Adequacy:  Measurement of Capital (GPS 112), and LPS 112 Capital Adequacy:  Measurement of Capital (LPS 112) with respect to the requirements for Additional Tier 1 Capital instruments, Tier 2 Capital instruments, and Mutual Equity Interests (MEIs). 

UK

• The Financial Conduct Authority has published its first annual perimeter report. The FCA perimeter determines which firms require authorisation and what level of protection consumers can expect for the financial services and products they purchase.

IAIS – International Association of Insurance Supervisors

• The IAIS has issued a public consultation on IAIS supervisory material. The IAIS is seeking feedback on:  
  • Draft revised IAIS Glossary;
  • Draft ComFrame Assessment Methodology;
  • Changes in the Introduction to ICPs and ICP 7 (Corporate Governance) for consistency with ComFrame development; and
  • Draft revised ICP 22 (Anti-Money Laundering and Combating the Financing of Terrorism). 

Insurance cases

• AIG Australia Limited v Kaboko Mining Limited [2019] FCAFC 96 – The Full Federal Court found that an insolvency exclusion in a D&O policy did not apply where the “Claim” was not founded on an allegation of insolvency (even though the claims would not have been made in the absence of the insolvency).
  
• Globe Church Incorporated v Allianz Australia Insurance Ltd [2019] NSWCA 27 – an insured’s cause of action to claim under a property policy arises when the damage occurs, not when indemnity is denied under the policy (NSWCA following the English law position).
  
• Euro Pools Plc v. Royal and Sun Alliance Plc [2019] EWCA Civ 808 – scope of a “hornets’ nest” notification under a professional indemnity policy.

Insurance articles

• The scope of an insured’s notification of circumstances: Euro Pools Plc v. Royal and Sun Alliance Plc [2019] EWCA Civ 808 – 4 New Square Insurance Blog
• Liability insurers’ exposure to s.51 non-party costs orders: Various Claimants v. AIG (Europe) Limited [2019] EWHC 34 (QB) – 4 New Square Insurance Blog 

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

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