NSW Chief Justice Tom Bathurst has called for further discussion on the operation of directors’ and officers’ insurance.

He told the Australian Insurance Law Association (AILA) national conference there must be certainty in the law applying to commercial activity.

Directors and officers need to be sure their policies are enforceable, insurers need to know the risk so they can price accurately and the Australian Securities and Investments Commission must be able to assess how insurance may affect regulation strategy.

“At present it is questionable whether sufficient clarity exists to enable those assessments to be made satisfactorily,” Justice Bathurst said.

While insurance for criminal penalties is likely to be deemed illegal or unenforceable by the courts, “it is not clear if a similar situation applies in relation to civil penalties”.

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