ANZ cannot recover roughly $117 million in class-action settlement costs from its own excess insurers, the Federal Court of Australia ruled on 9 October 2026. The bank's insurers do not owe the money because the settlements never qualified as covered "Loss" under ANZ's insurance policies, according to Insurance Business Australia. The ruling settles a dispute ANZ started in May 2025, when it sued its excess-layer insurers for reimbursement of two separate class-action settlements plus defence costs, in a case tracing back to conduct first flagged during the Banking Royal Commission, according to Lawyerly.
Official resources:
- Read the official notice from Insurancebusinessmag — Use this primary source to verify the official announcement.
- Read the official notice from Com — Use this primary source to verify the official announcement.
Table of Contents
- What the $117 Million Actually Covers
- Why the Insurers Won
- Who This Ruling Affects
- What Happens Next for ANZ
- Frequently Asked Questions
What the $117 Million Actually Covers
The figure is not one settlement but two combined. ANZ paid roughly $85 million to resolve the "O'Brien" case, a class action over car-loan flex commissions, and a further $31.92 million to resolve the "Reilly" case, a class action over consumer credit insurance (CCI), according to Insurance Business Australia. The Reilly case, filed as VID133/2020, targeted CCI policies ANZ sold alongside credit cards and personal loans.
Many customers who bought that insurance were ineligible to ever claim on it, which was the core allegation behind the class action, according to Lawyerly. Both underlying settlements were already finalized and approved by the Federal Court before ANZ turned to its insurers. The October 2026 ruling did not touch those settlements; it only decided who pays for them.
Why the Insurers Won
ANZ carried excess-layer insurance, coverage that sits above a primary policy and pays out once losses exceed a set threshold. The insurers named in the dispute include Zurich Australian Insurance Limited along with more than 20 other excess-layer underwriters, including Lloyd's of London syndicates, according to Insurance Business Australia. The Federal Court's central finding was narrow but decisive: none of ANZ's settlement payments, and none of the related defence costs, met the policy definition of covered "Loss." That single determination resolved the entire $117 million dispute, because it applied to both the O'Brien and Reilly payouts and to the legal costs tied to defending each case.
Who This Ruling Affects
This decision is a cost-allocation dispute between ANZ and its insurers. It creates no new right or claim for the bank's customers, and it does not reopen, reduce, or alter the O'Brien or Reilly settlements those customers already received, according to Insurance Business Australia.
For anyone tracking Australian bank class actions for compensation purposes, this case is a reminder that a settlement payout and an insurance coverage dispute are two separate legal tracks. Winning or losing the second does not reopen the first.
- Customers who already filed claims in O'Brien or Reilly: no action needed; your settlement outcome is unaffected.
- ANZ: absorbs the full $117 million in settlement and defence costs unless an appeal succeeds.
- The insurers: owe nothing toward either settlement under the current ruling.
What Happens Next for ANZ
The practical effect is that ANZ, not its insurers, now bears the full $117 million settlement and defence-cost burden from the O'Brien and Reilly cases, unless it successfully appeals the coverage ruling, according to Insurance Business Australia. The specific case citation and the name of the presiding judge appear only in secondary reporting summaries and have not been independently verified against the Federal Court's own judgment database.
Readers who need the formal citation for legal or research purposes should treat that detail as unconfirmed until the court's published judgment is checked directly. An appeal, if ANZ pursues one, would reargue the same question the Federal Court just decided: whether settlement payments tied to misconduct findings count as "Loss" under an excess insurance policy. Nothing in the current record indicates whether ANZ has committed to that step.
Frequently Asked Questions
Does this ruling change what customers already received from the O'Brien or Reilly settlements?
No. The ruling only decides who pays ANZ's insurance claim; it does not alter either settlement already approved by the Federal Court.
Why didn't ANZ's insurance cover the settlements?
The Federal Court found that neither the settlement payments nor the related defence costs met the policy's definition of covered "Loss."
Which insurers were involved in the dispute?
Zurich Australian Insurance Limited and more than 20 other excess-layer underwriters, including Lloyd's of London syndicates.