Tokio Marine Holdings Inc has said it is investigating the validity of insurance policies provided by its Australian unit to financial firm Greensill, Reuters has reported.

The article notes supply chain experts say if Greensill’s lending practices did not meet insurance contract standards or were inconsistent with normal accounting rules, then an insurer would have grounds to challenge whether coverage applied.

“We have concerns about the validity of all Greensill policies and are conducting an investigation,” Tetsuya Hirano, a Tokio Marine spokesman told Reuters.

Tokio Marine acquired Sydney-based BCC Trade Credit in a transaction that involved IAG selling its 50% interest in the underwriting agency on April 9, 2019.

IAG stressed in a statement to the Australian Securities Exchange that it has no net insurance exposure to Greensill trade credit policies after its slumping shares were last week briefly placed in a trading halt.

The insurer says the sale of its BCC interest had the result of eliminating net exposure to trade credit insurance.

As part of a transition arrangement, new policies were underwritten by IAG’s Insurance Australia Ltd (IAL) until June 30 that year, and Tokio Marine & Nichido Fire Insurance retained the risk for these policies net of reinsurance.

“In addition to extensive reinsurance placed by IAG, as part of the sale IAG entered into agreements with Tokio Marine for it to hold any remaining exposure to trade credit insurance written by BCC through IAL,” the statement said.

Working capital provider Greensill failed in last-minute NSW Supreme Court action taken earlier this month to avert the expiry of trade credit insurance policies that had provided $US4.6 billion in cover.

Greensill Capital last week appointed administrators from Grant Thornton.

BCC and Tokio Marine in Australia have not responded to insuranceNEWS.com.au requests for comment.