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Allens Insurance & Reinsurance publications

Linklaters Insights: UK Corporate Update

In the latest UK Corporate Update, our Linklaters alliance partners look at: the European Council to examine proposals to widen non-financial disclosure requirements of large companies and groups to include country-by-country reporting; the EU Commission reaches agreement on Transparency Directive amendments; dematerialisation of shares; and an AGM mid-season review.

Linklaters Insights: Insurance Update

In the latest Insurance Update, our Linklaters alliance partners look at: the FCA launches thematic review of insurers’ claims processes; developments in China, Solvency II update and long-term investments; 8th Annual World Takaful Conference, and recent deals.

Client Update: ASIC guidance on litigation funders’ obligation to manage conflicts

The Federal Government has recently limited the regulation of litigation funding to an obligation to have adequate arrangements in place to manage conflicts of interest. In the latest chapter in this continuing story, ASIC has released a Regulatory Guide that ‘fleshes out’ what it considers funders must do to comply with that obligation. Partner Jenny Campbell and Senior Associate Mark Hare report.

Focus: High Court broadens the reach of proportionate liability defences

In its first decision addressing proportionate liability in detail, the High Court has suggested a relatively broad approach to identifying ‘concurrent wrongdoers’. This will be welcomed by professional advisers and their liability insurers. Partner Andrea Martignoni, Senior Associate Andrew Byrne and Lawyer Sally Keenan report.Â

Focus: Bridgecorp overturned

In a decision that is good news for insurers, directors and other professionals in Australia, the New Zealand Court of Appeal has overturned the first instance decision in Bridgecorp, finding the directors were not prevented from having recourse to their D&O policy for cover for their defence costs. Partner Malcolm Stephens, Senior Associate Jonathan Light and Lawyer David Rountree report on this important development.

Focus: The importance of being … ‘businesslike’

The Queensland Court of Appeal has decided that an insured’s professional indemnity policy does not cover legal costs incurred in defending an excluded claim. This seemingly obvious and ‘businesslike’ conclusion was not so clear-cut on the express language of the policy. Partner Andrew Maher reports.

Focus: Post-Bridgecorp decision offers road map to section 6

In a unanimous decision in the first Australian case to deal with the issues raised by Bridgecorp, the New South Wales Court of Appeal has provided important guidance on the operation and scope of section 6 of the Law Reform (Miscellaneous Provisions) Act, including that the statutory charge it creates does not prevent an insurer from advancing defence costs to an insured. Partner Andrea Martignoni, Senior Associate Jonathan Light and Lawyer Theodore Souris report on this significant development.

Unravelled: Will ASIC shift its regulatory focus from disclosure to suitability?

The Financial System Inquiry (inevitably, the ‘Murray Inquiry’) is the successor of the Campbell Inquiry (1979-1981) and the Wallis Inquiry (1996-1997). Both the Campbell and Wallis reports considered that investors were best protected through disclosure and market integrity rules. Both reports assumed that adequate disclosure would result in efficient markets and efficient capital allocation: <I>caveat emptor</I> (‘let the buyer beware’).

Focus: Proposed reforms to create a consistent proportionate liability regime

In response to concerns about inconsistencies across various state-based jurisdictions, and following a public consultation process, the Standing Council on Law and Justice has released revised draft model legislation to reform Australia’s proportionate liability laws. Partner Andrea Martignoni and Senior Associate Andrew Lazzaro report on the proposals.

Unravelled: Retirement phase of superannuation

The Financial System Inquiry’s interim report has identified the retirement phase of superannuation as a priority issue that requires change. If the Federal Government decides to implement various policy options to encourage the development of more suitable products, it could result in significant changes to the retirement phase of superannuation.

Unravelled: Increasing ASIC’s enforcement powers

In its submission to the Financial System Inquiry, the Australian Securities and Investment Commission has again raised the issue of the penalties that are available to it to punish and deter corporate wrongdoing. ASIC’s submission recommends that a ‘holistic review’ be conducted into the availability and adequacy of penalties available under ASIC-administered legislation.

Client Update: Federal Government announces FOFA changes

The Federal Government announced today that it will press ahead with changes to the future of financial advice provisions, initially by regulation and then by legislation (when it has a more sympathetic Senate). The announcement includes some key changes, including narrowing the proposed general advice exception from the bans on conflicted remuneration for employees of financial services licensees (such as banks). Employees who provide general advice in relation to products issued or sold by the licensee will be able to receive conflicted remuneration, provided that it is not commission. While the announcement will provide some comfort to the industry, it does little to alleviate uncertainty. Partner Michelle Levy and Senior Associate Simun Soljo report.

Unravelled: Disclosure: current complexity, future clarity?

Since the 1996 Wallis Inquiry, disclosure has been at the heart of the regulatory philosophy for the retail financial services sector in Australia. Under the Financial System Inquiry’s terms of reference, the Inquiry ‘will refresh the philosophy, principles and objectives underpinning the development of a well-functioning financial system’ and it is likely this will include a rethink of the role of disclosure. With this in mind, we take a look at the current disclosure regime and consider its likely future.

Client Update: Clues for industry in ASIC’S Strategic Outlook

ASIC’s recently published Strategic Outlook outlines its priorities for responding to the key risks it believes will affect investors, and gives some interesting clues into what industry participants can expect from ASIC over the next 12 months, such as more surveillance of insider trading, breaches of continuous disclosure obligations and governance practices. It also provides a warning to the six largest financial institutions that it will be targeting them by focusing on their compliance with high-risk areas of the law. Partners Marc Kemp and Michelle Levy and Overseas Practitioner James Kanabar report.

Focus: Section 54 of the Insurance Contracts Act: Putting insureds in the driver’s seat

A recent High Court decision highlights the substantial scope of s54(1) of the Insurance Contracts Act 1984 (Cth) to prevent an insurer from denying cover following an insured’s non-compliance with certain terms of an insurance policy. The court confirmed that, in certain circumstances, the section can relieve an insured from the consequences of an act or omission which triggers coverage exclusions and limitations. Partner Andrew Maher, Senior Associate Jonathan Light and Lawyer Brydon Wang report.

Client Update: Another step towards prudentially regulating conglomerate groups

The Australian Prudential Regulation Authority has taken another step towards implementing its prudential framework for the supervision of conglomerate groups. While it has made some new prudential standards that are specific to conglomerate groups and extended some of its existing standards to such groups, it has delayed the commencement of these changes pending the final report of the Financial System Inquiry and the Government’s response to it. The Allens Financial Services Regulation team reports.

Unravelled: Bold and sometimes radical – the final Murray report

The Financial System Inquiry’s final report has been released. We haven’t tested this with ‘Word Cloud’, but we think the report can best be encapsulated in the word ‘however’. The financial system has held up well, ‘however, …’. And what follows the ‘however’ is often bold and sometimes radical. There are five chapters and just 44 recommendations – compare this with the Cooper Review’s 177 recommendations. But this helps – the messages are clear and the recommendations plain, although much of the implementation is left to the imagination.

Client Update: ASIC seeking feedback on electronic disclosure proposals

The Australian Securities and Investments Commission is seeking feedback on proposals to help facilitate the increased use of electronic means of providing disclosure for financial products and services. The proposals include new class order relief to facilitate the increased use of multimedia product disclosure statements, and revised guidance in Regulatory Guide 221. Partner Marc Kemp and Associate Simun Soljo report.