Indemnity insurance issues in NZ
Some new legal ground has been broken in New Zealand with respect to indemnity insurance covering financial planning practices.
The case involved a couple who claim to have lost hundreds of thousands of dollars through investments made on the recommendations of a financial advisory group, including into failed financial group Bridgecorp.
The couple argued that the financial advisory group, Vestar, held indemnity insurance with QBE Insurance and that QBE should have to pay to cover Vestar’s negligence.
However, newspaper reports from New Zealand today say that the court declined to overrule exception clauses in the insurance policy relating to Vestar recommending investment in companies that subsequently failed.
The court’s decision has given rise to claims in New Zealand that the question of indemnity insurance needs to be overhauled and has asked that the Government examine the issue.
AUTHOR
Mike Taylor
Recommended for you
Policy and advocacy specialist Benjamin Marshan has left the Council of Australian Life Insurers after less than a year, having joined in March from the Financial Planning Association of Australia.
The declining volume of risk advisers meant KPMG has found a rising lapse rate for insurance policies arranged by independent financial advisers, particularly in the TPD and death cover space.
The Life Insurance Code of Practice has transferred from the Financial Services Council to the Council of Australian Life Insurers.
The firm has announced it will no longer be writing new life insurance policies in the retail advised and corporate group insurance channels, citing a declining market and risk adviser numbers.
