French insurance company AXA has sued American insurers Genworth Financial Insurance for 90% of the £265million paid out by Santander Bank in Claims for mis-sold Payment Protection Insurance (PPI) (including administrative costs).
PPI policies packaged and sold by Santander Bank were underwritten by two companies that AXA bought from Genworth in 2015, Financial Insurance Co. Ltd (FICL) and Financial Assurance Co. Ltd (FACL).
AXA claimed that, as part of the acquisition deal, Genworth agreed to pay 90% of losses related to PPI mis-selling. The volume of Complaints made against Santander for mis-sold PPI rose significantly after the time of the purchase, especially in the lead up to the PPI deadline in August 2019.
Genworth put forward several counter arguments stating that it was not liable for the costs of these claims, particularly in cases where AXA had not properly contested them, and that Santander should be responsible for covering the cost of PPI refunds; these arguments were rejected by the Court.
The Judge, Simon Bryan, ruled that Genworth is liable for the costs. There will be a damages hearing in March 2020 where the exact amount payable by Genworth will be decided.