FIPI Claims News Update
A message from Claire Lofthouse AXAXL (Chair) and Jonathan Bennett Talbot (Deputy Chair)
As you may know, the LMA Claims Committee recently undertook a review of the governance of its technical claims committees. The aim is that committees are as effective as possible in representing the market’s interests, are aligned with LMACC priorities, and make best use of the members’ time and inputs. For the FIPI Committee this has meant reducing our membership from 19 to 14 members (to include a permanent representative from the U35 Committee) as well as formalising our Terms of References which can be viewed here. In order to ensure that the wider FIPI community are kept fully updated, we commit to:
- uploading fuller minutes of our meetings onto the LMA website post meetings
- holding an AGM later this year so that you can ask any questions you may have
- ensuring the circulation of this quarterly newsletter to update you as to our progress on our initiative
Initiatives: what are we doing for you?
FIPI are working on a number of initiatives all at varying stages.
- Grenfell & Cladding: cross-market working group has commenced work, with the aim of sharing advice/intelligence and producing a claims handling guidance document.
- Expert spend: cross-market working group has commenced work, focusing on issues specific to PIFI, as well as some wider LMA initiatives such as Project Gemini.
- Cross-market engagement: working group set up to liaise with Company market.
- Broker engagement: sub-group set up with workshops to be arranged.
- Under 35s: sub-group in place and events being arranged with under-35s.
- Australian Royal Commission final report published February 2019 (see attached link below).
- Regulatory focus on the conduct of banks and insurers (including role of senior executives): 22 Australian entities implicated with criminal and/or civil proceedings ongoing.
- Mortgage brokers, Independent Financial Advisers and larger FIs are facing claims.
- National Australia Bank, CBA & Allianz are heavily criticised.
- The fall-out is expected to have a material impact on the Australian economy, particularly on smaller FIs unable to take on the regulatory burden.
- There may also be further consolidation up the chain including the major banks divesting their wealth management arms.
- Worth reviewing to see what PIFI risks individual syndicates could have exposure to.
o There could be large costs exposures (subject to coverage) to ongoing regulatory, civil, criminal and insolvency claims under D&O policies.
o There is also a possible large civil liability exposure (again subject to coverage), such as to the AUD 850m “fees for no service scandal”.
- From an underwriting perspective, the Australian FI market has seen a large contraction and hardening of premium rates, with the Royal Commission and the ever buoyant class action system key drivers.
- Future developments to watch out for include the Royal Commission’s separate investigation into the aged-care sector: adverse findings are expected here, with possible implications in the D&O and GL space.
- By way of follow-up, Matt Andrews from Kennedys will be presenting to the PIFI Committee later in 2019.
FIPI-pedia: yout new FIPI know how site
FIPI CTP Guidelines one pager
FIPI CTP Guidelines full version
Australia Royal Commission final report