Insurance firm AIG has labelled Hanover Group Holdings' court claim against it as "misconceived".
Hanover and AIG are in an insurance stoush involving a directors and officers liability (D&O) policy worth up to $20 million.
The dispute is over whether this policy - which Hanover took out with AIG - covers claims involving two 2007 prospectuses, one issued by Hanover Finance and the other by United Finance.
Six former Hanover directors and promoters are being sued by the Financial Markets Authority over allegedly misleading or untrue statements made in these prospectuses and the insurance policy would be used to cover costs for this case or any damages that could be payable.
Although Hanover insurance broker Grant Dawson told the court yesterday that in 2007 AIG intended to provide cover for all prospectuses Hanover issued, this was disputed this morning.
The lawyer for AIG, Andrea Challis, said Hanover's claim was "misconceived".
Challis said in her opening submissions that Dawson had misinterpreted an email from the insurance giant.
While Hanover claimed AIG mislead it regarding the cover, Challis denied this.
"It was not AIG who misrepresented anything...." she said.
"In this instance, Hanover's remedy is against the broker, not AIG."
The case, being heard in the High Court at Auckland, continues today with AIG underwriter Vince Barker giving evidence.By Hamish Fletcher @hamishfletcher Email Hamish