Greensill lawsuit against IAG – Daily – Insurance News


The Greensill Bank administrator has filed a lawsuit against IAG in Federal Court for an order requiring the insurer to cover a $ 35 million ($ 49 million) claim.

Court documents were filed for Michael Frege in his capacity as insolvency administrator for Greensill Bank AG on Tuesday, the action involving a policy taken out through underwriting agency BCC Trade Credit.

IAG previously owned 50% of BCC, but sold its stake to Tokio Marine Management (Australasia) on April 9, 2019.

The documents have yet to be filed in response to the Federal Court filing, but IAG is expected to defend the action.

Supply chain finance group Greensill failed in a last-minute action in the New South Wales Supreme Court on March 1 to prevent the expiration of trade credit insurance policies that had provided a coverage of approximately $ 4.6 billion ($ 6.4 billion), with insolvency administrators subsequently appointed.

Dr Frege has been appointed to the Germany-based Greensill Bank, while the directors of Grant Thornton have been appointed for Greensill Capital.

IAG claimed it had no net insurance exposure on Greensill’s trade credit policies, with the financial statements recognizing an outstanding claim liability of $ 437 million, with reinsurance.

The Financial Times and other media reported that insurers had investigated the validity of policies provided to Greensill and raised questions about “misrepresentation” that could have been provided by the finance company.

IAG says in its report to investors released in August that there have been a growing number of issues raised in the public domain that raise concerns “about the validity, structure and placement” of so-called insurance.

“These are complex issues that continue to be studied by IAG, Tokio Marine and various other stakeholders,” he says.

The IAG noted a risk that Greensill’s directors or other claimants could take legal action to obtain legal confirmation of coverage or the validity of claims, and a risk that a reinsurer could challenge its obligations with respect to claims exposures.

“Based on various factors including the determination of the validity of the policy, the reinsurance agreements and the agreements with Tokio Marine, IAG remains convinced that for any trade debt that it may ultimately be required to pay, it does not has no net exposure to insurance, ”he said.

The lawsuit filed in Federal Court concerns Greensill transactions involving Dubai-based Emirates Hospitals Group.


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