Liability insurance: settlement of underlying claims by assured

The AMP Financial Planning case: the facts

In AMP Financial Planning Pty Ltd v CGU Insurance Ltd [2005] FCAFC 185 the insured, AMP Financial Planning Pty Ltd (AMP), was a licensed securities dealer that authorised particular financial advisers to operate on its behalf. Two of those financial advisers provided customers with inappropriate investment advice. The Australian Securities & Investment Commission (ASIC) investigated the financial advisers and found that certain investments were unsuitable. Ultimately, AMP and the advisers faced numerous claims. ASIC placed significant pressure on AMP to resolve these investors’ claims promptly and adequately.