This is our regular update of new insurance regulatory developments relevant to the Asia-Pacific* and India, new insurance-related case law in Hong Kong, Australia and England and interesting insurance articles from across the world.
Insurance regulatory updates
Hong Kong
Insurance Authority publishes its Annual Report 2018-19
Insurance Authority publishes Prescribed Scenarios for the stress and scenario testing to be used by authorized insurers carrying on general insurance business for the purpose of Own Risk Solvency Assessment Report
Singapore
New Industry Steering Committee to Elevate Culture and Conduct Standards for Insurance Industry
First civil penalty enforcement action for failure to disclose shareholding interests
Australia
Whistleblower policies required from 1 January 2020 for certain large and public companies
UK
FCA extends the Senior Managers and Certification Regime to 47,000 firms
FCA and Bank of England announce proposals for data reforms across the UK financial sector
IAIS
IAIS launches public consultation on Issues Paper on TCFD Recommendations
China
CBIRC Releases the Rules of the CBIRC on On-site Examination (Provisional)
Notice of the CBIRC General Office on Clarifying Timing of Removing Foreign Ownership Restrictions on Joint Venture Life Insurance Companies
CBIRC Revises and Releases the Implementation Rules of the Regulations on Foreign-funded Insurance Companies
Insurance cases
Enka Insaat ve Sanayi AS v OOO “Insurance Co Chubb”
Queen’s Bench Division (Commercial Court) [2019] EWHC 3568 (Comm)
– English High Court
Interpretation of arbitration clause in insurance contract – The defendant insurers were involved in the insurance and reinsurance of a Russian power plant in which the claimant had undertaken works. The claimant, a construction and engineering business, sought declaratory relief and an anti-suit injunction following an alleged breach of an agreement to refer disputes to International Chamber of Commerce (ICC) arbitration with a London seat. The court refused to grant the injunction, and in doing so, it considered the correct interpretation of arbitration clauses in relation to choice of law and choice of seat.
AXA SA v Genworth Financial International Holdings Inc
Queen’s Bench Division (Commercial Court) [2019] EWHC 3376 (Comm)
– English High Court
Whether a clause in sale and purchase agreement constituted a contract for indemnity – The court interpreted a clause of a sale and purchase agreement which provided for the seller to reimburse the buyer for 90% of customer redress payments arising from the mis-selling of insurance policies. It ruled that the clause was a covenant to pay, not a contract for indemnity, and that the seller’s right to payment was not conditional on its having pursued all reasonable defences. The buyer was not entitled to be subrogated to rights arising under an agency agreement between the seller’s subsidiary, which underwrote the policies, and the company which marketed them.
National Australia Bank Limited v Nautilus Insurance Pte Ltd (No 3) [2019] FCA 2139 (18 December 2019) – Federal Court of Australia
Construction of insurance policy – where insured enters into settlement agreement with third party without prior consent of insurer – whether insured is required to prove underlying legal liability to pay third party separate from settlement agreement – general position at law not determinative – proper construction of contract demonstrates insured not required to prove underlying legal liability
Frederick William McMurray and Jennifer Grace McMurray -v- AIG Insurance Australia Ltd [No 3] [2019] WASC 452 (6 December 2019) – Western Australian Supreme Court
Subrogation – novel category of subrogation asserted – The court confirmed that Australian law has rejected the English law position that the doctrinal basis for the availability of subrogation is based upon the restitutionary concept of unjust enrichment. Australian law permits restitution in recognised categories of cases, namely: vendors lien; payment out of prior securities; indemnity insurance, guarantees; executors and receivers carrying on ultra vires business; unauthorised or unenforceable borrowings by, among others, married women, infants, partners and companies; creditors of a trading trust in priority to the beneficiaries; and marshalling.
The court stated: “in this country restitution arises in recognised categories of case and is not necessarily available whenever, and to the extent that, a defendant is enriched at the plaintiff’s expense in circumstances that render the enrichment unjust. Although, over time, novel categories of case may come to be recognised, or existing categories refined, that must occur in accordance with the common law’s ordinary process of incremental development...”
Insurance articles / news
China: Biggest life insurer’s net profits soar by over 400%
Indonesia: Insurance Board endorses tighter risk management of insurers
Indonesia moves to rescue troubled state-owned insurers
India’s regulator disciplines brokers in US$42m fraud: report
MAS alerts financial firms to vulnerabilities in Microsoft Windows
AIA Singapore names Delon Choo CEO of advisory arm
Zurich appoints two senior execs in Australasia
Insurers honoured with top brand listing for cutting fossil fuel ties
Liberty Mutual Re’s hire in Singapore flags Asia ambition
*Hong Kong, Singapore, China, Malaysia, Vietnam, Thailand and Australia.