Fourteen-year delay last time on insurance

ANZ last made a claim under a banker's blanket bond for some of the losses generated by one of the multiple messes in India that emerged in 1992.

The Lloyds syndicate carrying the insurance paid 75 per cent of the claim (on a policy capped at $130 million in the dollars of the day), plus interest, in 2006.

The 14-year wait on the claim - almost the entire, boom time cycle - might be a precedent.

Some of the insurable ANZ flaws for the earlier episode recur in the Opes Prime affair.

In 1992 ANZ played a side role in a securities fraud on the Central Bank of India. Lack of control over deposits saw a staff member divert five crore rupees to another account, a step in a wider business and political drama.

So staff fraud is covered.

The lack of follow up on a 2005 audit report was the main internal fault this time, more so than the lack of credit controls. The lack of follow up is apparently typical of the time.

Claims under the 1992 insurance policy obliged ANZ to first resolve civil claims against the perpetrators of the fraud. ANZ eventually sued the syndicate in 2003.

ANZ finally got a court date in 2006, and a settlement soon after.

Who is carrying the insurance this time, and does ANZ have any? Is the insurance held by anyone likely to decline to pay?

The Sheet raised these points with ANZ yesterday but the bank did not have an opportunity to respond in detail, though did confirm that a settlement has
not yet been finalised with insurers but also said it was not yet appropriate to comment on it.

Aspects of the bank's settlement with the administrators of Opes Prime may become clearer as soon as today.