ANZ Loses A$116.92 Million Insurance Fight Over Two Class Action Settlements

This is not a new A$117 million settlement that consumers can claim from, and it is an Australian case, not a U.S. one.

On October 9, 2026, the Federal Court of Australia ruled that Australia and New Zealand Banking Group (ANZ) cannot recover about A117million(A116.92 million exactly) from its excess insurers. The money was paid by ANZ to settle two earlier class actions, one over consumer credit insurance and one over car-loan “flex commissions.” The court also held that ANZ could not recover its related defence costs.

The ruling decides who bears the cost of settlements ANZ had already agreed to. It does not create any new right for customers and does not reopen the original cases.

Quick Facts: ANZ v Zurich Insurance Ruling

Detail	Information
Case name	Australia and New Zealand Banking Group Limited v Zurich Australian Insurance Limited
Citation	[2026] FCA 1490
Court	Federal Court of Australia
File number	VID 478 of 2025 (reported)
Judge	Justice Jonathan Beach (reported)
Judgment date	October 9, 2026
Plaintiff	ANZ
Defendants	Zurich Australian Insurance Limited and more than 20 Lloyd’s syndicates and other excess underwriters (reported)
Policies	Three excess policies for the period September 30, 2017 to September 30, 2018 (reported)
Amount in dispute	A$116.92 million in settlement payments, plus defence costs
First underlying settlement	A$85 million, the O’Brien proceeding (car-loan flex commissions)
Second underlying settlement	A$31.92 million, the Reilly proceeding (consumer credit insurance)
Coverage proceeding filed	May 2025 (reported)
Outcome	Court found the payments and defence costs were not covered “Loss”; ANZ lost
Consumer claim form	None
Consumer claim deadline	None
Appeal status	Not independently verified; check the court record

What Did ANZ Lose?

ANZ was not ordered to pay A$116.92 million to a new group of customers. The bank had already agreed to the two underlying settlements. ANZ then sued its excess insurers for reimbursement of the settlement payments and the defence costs of both proceedings. The insurers had denied cover.

The Federal Court sided with the insurers. For ANZ, the practical result is that it must absorb the cost itself under the policies in dispute, subject to any further orders or appeal.

What Were the Two Underlying Class Actions?

Both arose from sales practices that drew scrutiny after Australia’s banking royal commission (the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, 2018 to 2019).

1. The Reilly proceeding: consumer credit insurance (A$31.92 million)

This case challenged consumer credit insurance products sold to credit card and personal loan customers. The claims alleged customers had not asked for the cover, did not understand it, or were led to believe it was compulsory, and that it gave little or no value. ANZ collected premiums and retained commission, with the rest going to insurance subsidiaries or partners. ANZ agreed to pay A31.92millionascharacterisedinthecoveragecase.Somesourcesdescribethebroaderconsumercreditinsurancesettlementaslarger(aroundA47 million across defendants, approved in 2023, with distribution largely completed by mid-2024), so the A$31.92 million figure refers to the portion at issue in the insurance dispute.

2. The O’Brien proceeding: Esanda car-loan flex commissions (A$85 million)

This case concerned car loans arranged through ANZ’s former Esanda dealer-finance business. Under flex-commission arrangements, dealers could set a borrower’s interest rate above a base rate, and a higher rate meant a higher dealer commission. The claims alleged the arrangement was not disclosed and inflated borrowers’ interest charges. ANZ announced the A$85 million settlement in October 2024, and court approval is reported to have followed in 2025.

Why Did the Federal Court Reject ANZ’s Claim?

The decision turned on the wording of the policies and on what the underlying claims were really about.

Not covered “Loss”

The policies covered “Loss,” but the court found the settlement sums were not covered Loss. It characterised the underlying claims as essentially restitutionary: they sought the return of premiums or excess interest that ANZ itself had collected and, the plaintiffs said, should not have kept. The policy wording excluded fees, commissions or other charges paid or due to the insured, and the court rejected ANZ’s arguments that premiums and interest should be treated differently.

An insurer’s promise to cover liability does not automatically mean it must reimburse a business for giving back money it received through charges it was not entitled to retain. This is a core principle of indemnity insurance.

A second exclusion also applied

The court separately held that an exclusion for claims arising from the actual or alleged charging of excessive, undisclosed or otherwise improper fees, profits, commissions, costs or charges applied. That gave the insurers a second, independent basis to deny cover.

Defence costs

Because the same exclusions applied, ANZ also could not recover its defence costs for the two proceedings.

Background to the dispute

ANZ’s primary insurance of A$50 million had reportedly already been eroded by other claims, so ANZ turned to its excess tower for the settlement sums and defence costs. The insurers denied cover, and ANZ sued for a declaration that it was entitled to indemnity.

What Laws Are Involved?

The insurance dispute

• Insurance Contracts Act 1984 (Cth). Governs most general insurance contracts in Australia, including the duty of utmost good faith (s 13) and the rules on how insurers may rely on policy terms. The court’s task was mainly to construe the policy wording rather than apply a statutory right.
• The indemnity principle and the law of “Loss.” Under general insurance law, indemnity policies cover loss from a liability, and many policies, including these, exclude amounts that merely return money the insured received. The ruling shows how courts apply that line to settlements.
• Federal Court of Australia Act 1976 (Cth). Governs the court’s jurisdiction and appeals. An appeal from a final judgment lies to the Full Court under s 24(1)(a), generally by notice filed within 21 days (Federal Court Rules 2011). If the orders are interlocutory, leave to appeal is needed under s 24(1A). Which applies depends on how the court’s orders are framed, so check the record.

The underlying class actions

• Part IVA of the Federal Court of Australia Act 1976 (Cth) and Part 4A of the Supreme Court Act 1986 (Vic). Establish representative (class action) proceedings. Section 33V of each requires court approval of settlements, which is why the earlier settlements went through approval and distribution schemes.
• Australian Securities and Investments Commission Act 2001 (Cth). Provisions on misleading or deceptive conduct (s 12DA) and unconscionable conduct in financial services are commonly used in claims about financial products.
• National Consumer Credit Protection Act 2009 (Cth). Governs consumer credit, including responsible lending obligations. ASIC banned flex commissions in motor vehicle finance from November 1, 2018.
• Corporations Act 2001 (Cth). Contains financial services conduct and disclosure rules relevant to insurance distribution.

The article describes the claims as alleged in the earlier proceedings. The settlements did not involve admissions of liability by ANZ.

Does the Ruling Mean ANZ Must Pay Customers Again?

No. It concerns insurance reimbursement for settlements already agreed. It does not announce a new fund, reopen the original cases, or create a claims process. A dispute between a bank and its insurers is legally different from a settlement between a bank and consumers. The ruling decides who bears the financial cost under the policies, not what customers are owed.

Can Customers Claim Any of the A$116.92 Million?

No new claim form, deadline or payout exists because of this ruling. The A$116.92 million is the combined total of the two earlier settlements, not a fund open for new applications. There is no reason to pay anyone to file a claim based on this headline.

If you believe you were an eligible group member in the earlier consumer credit insurance or O’Brien flex-commission settlements, your rights were set by those court orders and distribution schemes, whose registration deadlines have passed or largely concluded. If you never received notice or payment, contact the settlement administrator or former class counsel for that specific case to confirm your status. Class counsel were reported to be Slater and Gordon (consumer credit insurance) and Maurice Blackburn (O’Brien). Keep any earlier correspondence, claim numbers or bank details you submitted.

Beware of scams. Treat any message offering a payout from the “ANZ insurance ruling,” or asking for a fee or personal information, with suspicion.

U.S. readers have no rights arising from this decision.

What Does the Decision Mean More Broadly?

The ruling reinforces that financial institutions generally cannot recover, as insured “Loss,” amounts that represent returning money they charged customers under products later challenged as improper or of little value. Coverage turns on precise policy wording and the true character of the underlying liability. The decision does not mean every settlement involving consumer charges is automatically uninsurable, because each policy and claim is fact-specific. It may still be closely watched by banks, insurers and brokers dealing with excess liability policies.

What Happens Next?

ANZ could seek consequential orders or appeal, but the appeal status was not independently confirmed. Do not treat an appeal as filed or successful unless a court record confirms it.

Key Dates

Date	Event
September 30, 2017 to September 30, 2018	Excess insurance policy period (reported)
2018 to 2019	Banking royal commission
June 2023	Federal Court reported to approve the consumer credit insurance settlement
2023 to 2024	Consumer credit insurance distribution reported largely completed
October 2024	ANZ announces the A$85 million O’Brien settlement
2025	O’Brien settlement reported approved
May 2025	ANZ files insurance coverage proceeding (reported)
October 9, 2026	Federal Court rules ANZ not entitled to indemnity for the A$116.92 million or the defence costs

Frequently Asked Questions

Is there a new ANZ A$117 million class action settlement?

No. The ruling concerns insurance coverage for two earlier settlements.

Can ANZ customers claim part of the A$116.92 million?

Not through any process arising from this ruling.

What was the Reilly settlement about?

Consumer credit insurance sold to credit card and personal loan customers. The portion at issue in the coverage case was A$31.92 million.

What was the O’Brien settlement about?

Flex commissions on car loans arranged through ANZ’s former Esanda dealer-finance business. It settled for A$85 million.

Why did ANZ lose?

The court found the payments were not covered “Loss,” because they were essentially the return of premiums and interest ANZ had collected, and that a separate exclusion for excessive, undisclosed or improper charges also applied.

Were defence costs covered?

No. The same exclusions applied to defence costs.

Did the court find ANZ liable for new consumer claims?

No. It did not decide any new consumer class action.

Did customers in the earlier settlements already get paid?

Distribution schemes applied under the earlier court-approved settlements, and their deadlines have passed or largely concluded. Contact the administrator for that case if you have questions.

Can ANZ appeal?

Possibly, depending on whether the orders are final or interlocutory. The appeal status was not verified.

Does this affect other banks?

It offers guidance on how Australian courts may treat restitutionary settlements under “Loss” wording, but each policy is different.

Editorial Note and Disclaimer

This article is general information about an Australian court decision and is not legal or financial advice. Australian insurance and class action law differs from U.S. law. AllAboutLawyer.com is a U.S. consumer legal information site and is not a law firm. Consult a qualified lawyer licensed in the relevant jurisdiction about your own situation. AllAboutLawyer.com corrects errors promptly when they are identified.

For another dispute over whether an insurer must cover a class action settlement, see AllAboutLawyer.com’s Crown Resorts A$72.5 Million Settlement, Why Crown Is Suing Insurer RiverStone. It is a separate Australian insurance dispute and does not involve ANZ.

Sources and References

1. Federal Court of Australia, Australia and New Zealand Banking Group Limited v Zurich Australian Insurance Limited [2026] FCA 1490, judgment of October 9, 2026 (File VID 478 of 2025). Judgments database: https://www.fedcourt.gov.au/digital-law-library/judgments
2. ANZ, “ANZ agrees to settle superannuation class action and Esanda class action” (October 4, 2024). https://www.anz.com.au/newsroom/media/2024/october/anz-agrees-to-settle-superannuation-class-action-and-esanda-clas/
3. Federal Court of Australia and Supreme Court of Victoria settlement approval orders for the Reilly (consumer credit insurance) and O’Brien (Esanda flex commission) proceedings.
4. Case Law Wire and contemporaneous reporting on the October 9, 2026 decision.
5. Insurance Contracts Act 1984 (Cth); Federal Court of Australia Act 1976 (Cth), Part IVA and s 24; Federal Court Rules 2011 (Cth); Supreme Court Act 1986 (Vic), Part 4A; ASIC Act 2001 (Cth); National Consumer Credit Protection Act 2009 (Cth); Corporations Act 2001 (Cth).
6. Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, Final Report (2019).

By Israr Ahmad, Legal Content Researcher Last updated: October 12, 2026 Status: Court decision explainer. No new consumer settlement. No claim form. No deadline.