Insured to be Wary of Unreasonable Settlements

Nov 2007 |

In CGU Insurance Limited v AMP Financial Planning Pty Ltd [2007] HCA 36, CGU Insurance Limited was the professional liability insurer of AMP under a claims made policy.  Coverage under the policy extended to claims for civil liability against AMP and its financial advisers, which arose from the misconduct of AMP's financial advisers.  Two representatives of AMP who held the appropriate AMP securities authorities, were embroiled in a failed investment scheme in which $3.4 million of investors' funds were lost.  ASIC was notified of the failed investments, investigated the relevant parties, and subsequently banned the two AMP representatives from participation in the securities industry.

by Mark Brooks, Partner |

and Peter Coggins, Solicitor

Insurance Law, November 2007