In the wake of the Greensill Group's collapse, Insurance Australia Group (IAG (LON:ICAG)) is embroiled in a multi-billion-dollar legal battle, facing over $7 billion in lawsuits. The insurer has hit back, arguing that it should not bear financial responsibility for the fallout, despite criticisms from the Swiss Financial Market Supervisory Authority (FINMA) regarding lax oversight by Credit Suisse (SIX:CSGN) in connection with insurance policies related to Greensill.
IAG has been accused of negligence after it emerged that an underwriter at a half-owned agency signed policies without the company's consent. These policies are at the center of legal actions involving investments in entities such as Sanjeev Gupta’s steel operations and a New York skyscraper with ties to Russian oligarchs. Credit Suisse funds, which are pursuing legal action against IAG, have countered the insurer's claims of ignorance, stating that the allegations lack clarity.
The dispute intensified today, as IAG pointed to due diligence failures by Credit Suisse funds in Federal Court filings. IAG claims that the funds did not properly verify the validity of insurance policies before purchasing securities from Greensill-affiliated companies, resulting in $2.8 billion in claims. This comes after FINMA censured Credit Suisse for insufficient oversight regarding insurance handled by Greensill.
Tokio Marine Holdings Inc., which acquired Bond & Credit Co. from IAG in 2019, along with its subsidiary Bond & Credit Company, are also defendants in this sprawling litigation. They are accused by the funds of being aware of irregularities in policy issuances as early as mid-2020 but failing to disclose them.
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