{"id":"nsw:act-1986-013","name":"Insurance (Application of Laws) Act 1986","slug":"insurance-application-of-laws-act-1986","collection":"act","jurisdiction":"nsw","status":"in_force","isInForce":true,"actNumber":"13 of 1986","makingDate":null,"administeringDepartment":null,"currentVersion":{"id":107468,"registerId":"nsw-act-1986-013-current","compilationNumber":null,"startDate":"2026-04-03","status":"InForce","reasons":null,"registeredAt":null},"sections":[{"sectionNumber":"1","sectionType":"section","heading":"Name of Act","content":"#### 1 Name of Act\n\n1 Name of Act\n\n> This Act may be cited as the [Insurance (Application of Laws) Act 1986](/view/html/inforce/current/act-1986-013).","sortOrder":0},{"sectionNumber":"2","sectionType":"section","heading":"Commencement","content":"#### 2 Commencement\n\n2 Commencement\n\n> > (1) Sections 1 and 2 shall commence on the date of assent to this Act.\n> \n> > (2) Except as provided by subsection (1), this Act shall commence on such day as may be appointed by the Governor and notified by proclamation published in the Gazette.","sortOrder":1},{"sectionNumber":"3","sectionType":"section","heading":"Definitions","content":"#### 3 Definitions\n\n3 Definitions\n\n> > (1) In this Act, except in so far as the context or subject-matter otherwise indicates or requires:\n> > \n> > applied provision means a provision of:\n> > \n> > > (a) the [Insurance Contracts Act 1984](http://www.legislation.gov.au/) of the Commonwealth, or\n> > \n> > > (b) (Repealed)\n> > \n> > > (c) an instrument in force under either of those Acts,\n> > \n> > being a provision that, pursuant to this Act, applies as a law of New South Wales.\n> > \n> > regulation means a regulation made under this Act.\n> \n> > (2) An applied provision shall be construed in accordance with the [Acts Interpretation Act 1901](http://www.legislation.gov.au/) of the Commonwealth, as in force from time to time.\n> \n> > (3) Without affecting the generality of section 31 of the [Interpretation Act 1987](/view/html/inforce/current/act-1987-015), this Act shall be construed as operating to the full extent of, but so as not to exceed, the legislative power of Parliament.\n> \n> > (4) Notes included in this Act do not form part of this Act.\n> \n> **s 3:** Am 1987 No 48, Sch 32; 2002 No 26, Sch 2.5 \\[1\\]–\\[3\\].","sortOrder":2},{"sectionNumber":"4","sectionType":"section","heading":"Crown bound","content":"#### 4 Crown bound\n\n4 Crown bound\n\n> > (1) This Act and the applied provisions bind the Crown in right of New South Wales and also, so far as the legislative power of Parliament permits, the Crown in all its other capacities.\n> \n> > (2) Nothing in this Act renders the Crown, whether in right of New South Wales or otherwise, liable to be prosecuted for an offence against an applied provision.","sortOrder":3},{"sectionNumber":"5","sectionType":"section","heading":"Application of Insurance Contracts Act 1984 of the Commonwealth etc","content":"#### 5 Application of Insurance Contracts Act 1984 of the Commonwealth etc\n\n5 Application of [Insurance Contracts Act 1984](http://www.legislation.gov.au/) of the Commonwealth etc\n\n> > (1) Except to the extent to which the regulations otherwise provide and subject to any modifications specified in the regulations, the provisions of:\n> > \n> > > (a) the [Insurance Contracts Act 1984](http://www.legislation.gov.au/) of the Commonwealth, as in force from time to time, and\n> > \n> > > (b) any instrument in force under that Act,\n> > \n> > apply as laws of New South Wales to and in respect of all contracts of insurance and proposed contracts of insurance entered into, or proposed to be entered into, in the course of State insurance, including contracts and proposed contracts entered into, or proposed to be entered into, by the State and some other insurer as joint insurers.\n> \n> > (2) Subsection (1) does not operate so as to apply section 5 or 9 (2) of the [Insurance Contracts Act 1984](http://www.legislation.gov.au/) of the Commonwealth as a law of New South Wales.","sortOrder":4},{"sectionNumber":"6","sectionType":"section","heading":"Application of Corporations legislation to State insurance matters","content":"#### 6 Application of Corporations legislation to State insurance matters\n\n6 Application of Corporations legislation to State insurance matters\n\n> > (1) The regulations may declare any State insurance matter to be an applied Corporations legislation matter for the purposes of Part 3 of the [Corporations (Ancillary Provisions) Act 2001](/view/html/inforce/current/act-2001-032) (with such modifications as may be specified in the declaration) in relation to the following:\n> > \n> > > (a) all or any of the provisions of Chapter 7 (Financial services and markets) of the [Corporations Act 2001](http://www.legislation.gov.au/) of the Commonwealth,\n> > \n> > > (b) all or any of the provisions of the [Australian Securities and Investments Commission Act 2001](http://www.legislation.gov.au/) of the Commonwealth relating to financial products or financial markets.\n> > \n> > Note—\n> > \n> > Part 3 of the [Corporations (Ancillary Provisions) Act 2001](/view/html/inforce/current/act-2001-032) provides for the application of provisions of the [Corporations Act 2001](http://www.legislation.gov.au/) and Part 3 of the [Australian Securities and Investments Commission Act 2001](http://www.legislation.gov.au/) of the Commonwealth as laws of the State in respect of any matter declared by a law of the State (whether with or without modification) to be an applied Corporations legislation matter for the purposes of that Part in relation to those Commonwealth provisions. Section 14 (2) of the [Corporations (Ancillary Provisions) Act 2001](/view/html/inforce/current/act-2001-032) ensures that a declaration made for the purposes of Part 3 of that Act only operates to apply a provision of the Corporations legislation to a matter as a law of the State if that provision does not already apply to the matter as a law of the Commonwealth. If a provision referred to in a declaration already applies as a law of the Commonwealth, nothing in the declaration will affect its continued operation as a law of the Commonwealth.\n> \n> > (2) Without limiting subsection (1), any such regulations may:\n> > \n> > > (a) specify modifications to the definitions and other interpretative provisions of the Corporations legislation relevant to any provision of the Commonwealth legislation that is the subject of the declaration, and\n> > \n> > > (b) provide for ASIC to exercise a function under any provision of the Corporations legislation that is the subject of the declaration, but only if:\n> > > \n> > > > (i) ASIC is to exercise that function pursuant to an agreement of the kind referred to in section 11 (8) or (9A) (b) of the [Australian Securities and Investments Commission Act 2001](http://www.legislation.gov.au/) of the Commonwealth, and\n> > > \n> > > > (ii) ASIC is authorised to exercise that function under section 11 of the [Australian Securities and Investments Commission Act 2001](http://www.legislation.gov.au/) of the Commonwealth, and\n> > \n> > > (c) specify that a reference to ASIC in any provision of the Corporations legislation that is the subject of the declaration is to be read as a reference to another person, and\n> > \n> > > (d) identify the provisions of the Corporations legislation to which the declaration relates by reference to that legislation as in force at a particular time, and\n> > \n> > > (e) specify a court of this State (other than the Supreme Court) to exercise any function conferred on a court or the Court by any provision of the Corporations legislation to which the declaration relates.\n> \n> > (3) Words and expressions used in this section and also in Part 3 of the [Corporations (Ancillary Provisions) Act 2001](/view/html/inforce/current/act-2001-032) have the same meanings as they have in that Part.\n> \n> > (4) In this section:\n> > \n> > State insurance matter means:\n> > \n> > > (a) State insurance within the meaning of section 51 (xiv) of the [Commonwealth Constitution](http://www.legislation.gov.au/), or\n> > \n> > > (b) contracts of insurance and proposed contracts of insurance entered into, or proposed to be entered into, by the State and some other insurer as joint insurers, or\n> > \n> > > (c) conduct in connection with contracts and proposed contracts of the kind referred to in paragraph (b).\n> \n> **s 6:** Subst 2002 No 26, Sch 2.5 \\[4\\].","sortOrder":5},{"sectionNumber":"7","sectionType":"section","heading":"Exclusion of GIO insurance funds administration business","content":"#### 7 Exclusion of GIO insurance funds administration business\n\n7 Exclusion of GIO insurance funds administration business\n\n> > (1) The applied provisions do not apply to or in respect of the insurance funds administration business of the Government Insurance Office of New South Wales (that is, business of the kind referred to in section 5B (1) (b) of the Government Insurance Act 1927) or to or in respect of that Office in its conduct of that business.\n> \n> > (2) This section continues to have effect with respect to that insurance funds administration business even though it is transferred to another person or body under the [Government Insurance Office (Privatisation) Act 1991](/view/html/inforce/current/act-1991-038).\n> \n> **s 7:** Am 1991 No 38, Sch 2.","sortOrder":6},{"sectionNumber":"8","sectionType":"section","heading":"Recovery of penalties","content":"#### 8 Recovery of penalties\n\n8 Recovery of penalties\n\n> > (1) Proceedings for an offence against an applied provision may be dealt with summarily:\n> > \n> > > (a) before the Local Court, or\n> > \n> > > (b) before the Supreme Court in its summary jurisdiction.\n> \n> > (2) Where proceedings for an offence against an applied provision are dealt with before the Local Court, the maximum pecuniary penalty that may be imposed in respect of the offence is $5,000 or the pecuniary penalty indicated in the provision in respect of the offence, whichever is the lesser.\n> \n> > (3) Where proceedings for an offence against an applied provision are dealt with before the Supreme Court in its summary jurisdiction, the maximum pecuniary penalty that may be imposed in respect of the offence is the pecuniary penalty indicated in the provision in respect of the offence.\n> \n> **s 8:** Am 2007 No 94, Sch 5.","sortOrder":7},{"sectionNumber":"9","sectionType":"section","heading":"Regulations","content":"#### 9 Regulations\n\n9 Regulations\n\n> > (1) The Governor may make regulations, not inconsistent with this Act, for or with respect to any matter that by this Act is required or permitted to be prescribed or that is necessary or convenient to be prescribed for carrying out or giving effect to this Act.\n> \n> > (2) A provision of a regulation may:\n> > \n> > > (a) apply generally or be limited in its application by reference to specified exceptions or factors,\n> > \n> > > (b) apply differently according to different factors of a specified kind, or\n> > \n> > > (c) authorise any matter or thing to be from time to time determined, applied or regulated by any specified person or body,\n> > \n> > or may do any combination of those things.","sortOrder":8}],"analysis":{"issue_detection":{"absurdities":[],"contradictions":[]},"summary":{"complexity_score":4,"scope_assessment":{"changed":false,"description":"Based on the metadata available, the Act appears to have remained largely stable since 1992, with only minor amendments in 2002 and 2009. There is no indication of significant scope creep or narrowing from its original purpose of resolving which jurisdiction's insurance laws apply to cross-border insurance contracts."},"complexity_factors":["Deals with conflict of laws (private international law) principles, which are inherently technical","Requires understanding of both NSW law and the laws of other Australian jurisdictions to apply correctly","Interacts with federal insurance legislation, adding a layer of jurisdictional complexity","Limited amendment history may mean it references outdated legislative frameworks","Actual provisions not supplied, preventing full complexity assessment — score is conservative"],"plain_english_summary":"## Insurance (Application of Laws) Act 1986 (NSW)\n\n**What this law does:**\nThis is a NSW Act that deals with which state or territory's laws apply when an insurance contract crosses jurisdictional boundaries — for example, when an insurer is based in one state but the policyholder lives in another.\n\n**Who it affects:**\n- People and businesses holding insurance policies in NSW\n- Insurance companies operating across multiple Australian states or territories\n- Anyone involved in an insurance dispute where it's unclear which state's rules should govern the contract\n\n**Why it matters:**\nBefore national harmonisation of insurance laws, different Australian states had different rules about insurance contracts. This Act helped resolve the confusion about *which state's law applied* to a given policy — particularly important when settling disputes, determining what an insurer must pay, or understanding your rights as a policyholder.\n\n**Important caveat:**\nThe actual substantive content of this Act is not visible in the provided text — only metadata (status information, version history, and administrative details) has been supplied. Based on the title and its history, the Act appears to still be in force but has not been substantially amended since 2009, suggesting it plays a narrow, technical role in NSW's insurance law framework."},"flash_summary":{"complexity_score":6,"scope_assessment":{"changed":true,"description":"This Act changes the scope of applicable law for State insurance matters by making provisions of the Commonwealth Insurance Contracts Act 1984 (and instruments under that Act) operate as laws of New South Wales for contracts of State insurance, subject to regulation (s 5). It also creates a regulatory route to apply selected Corporations legislation provisions to State insurance matters with possible modifications (s 6). The Act concurrently narrows scope by excluding the GIO insurance funds administration business from the applied provisions (s 7). The practical reach of these changes depends on regulations made under ss 5 and 9."},"complexity_factors":["Cross‑jurisdictional incorporation: the Act imports provisions of Commonwealth Acts and instruments to operate as State law (s 5), creating dependency on external texts and their amendments (s 3(2)).","Broad regulation-making power: Governor may make regulations that modify, limit or delegate application of the imported provisions (s 5; s 9), increasing rule‑setting complexity.","Selective and modulable application of Corporations provisions: regulations may declare State insurance matters to be subject to parts of the Corporations Act/ASIC Act with specified modifications, substitutions and court allocations (s 6).","Interpretive alignment: applied provisions are to be construed under the Commonwealth Acts Interpretation Act, requiring alignment of statutory construction approaches across jurisdictions (s 3(2)).","Exception and exclusion mechanics: a statutory carve‑out for the GIO funds administration business remains effective even after transfer (s 7), requiring attention to institutional history and transfers.","Variable enforcement regimes: summary jurisdiction pathways and differing pecuniary caps depending on forum add procedural complexity (s 8).","Dependence on external determinations: regulations can authorise other persons or bodies to determine matters from time to time (s 9(2)(c)), introducing delegated decision points."],"plain_english_summary":"This Act imports specified Commonwealth insurance and related corporate provisions into New South Wales to operate as state law for “State insurance” and contracts entered by or for the State, subject to Governor-made regulations that may modify, limit or disapply them. It affects insurers and the State (including joint-insurance arrangements), exempts the GIO funds administration business, and channels enforcement into summary courts with specified pecuniary limits—leaving key scope and detail to later regulations."},"kimi_summary":{"content_quality":"ok","complexity_score":4,"scope_assessment":{"changed":true,"description":"The original 1986 Act was narrowly focused on applying the *Insurance Contracts Act 1984* to State insurance. However, section 6 (substituted in 2002) significantly expanded the scope by creating a mechanism to apply Chapter 7 of the *Corporations Act 2001* (financial services and markets) and ASIC Act provisions to State insurance matters. This transformed the Act from a simple insurance contracts statute into a broader financial services regulatory tool, potentially subjecting State insurance activities to the complex regulatory regime governing financial products and markets."},"complexity_factors":["Heavy reliance on external legislation — the Act's core operation depends on incorporating the Commonwealth *Insurance Contracts Act 1984* 'as in force from time to time', creating a dynamic reference that changes as federal law changes","Nested conditional logic in section 5 — the application is subject to both regulatory override ('Except to the extent to which the regulations otherwise provide') AND specific exclusions ('subject to any modifications specified in the regulations')","Cross-referencing to constitutional concepts — section 6 requires understanding of 'State insurance' under section 51(xiv) of the Commonwealth Constitution","Multiple layers of statutory incorporation — section 6 creates a pathway to apply yet another body of law (Corporations Act Chapter 7 and ASIC Act provisions) through a third statute (Corporations (Ancillary Provisions) Act 2001)","Specific carve-outs and exceptions — section 7 creates a permanent exclusion for GIO insurance funds administration that survives privatisation, and section 5(2) excludes specific sections of the applied Act","Dual interpretation regimes — section 3(2) mandates use of the Commonwealth *Acts Interpretation Act 1901* for 'applied provisions' while the rest of the Act uses NSW interpretation rules"],"plain_english_summary":"This law is a **'reference statute'** — it doesn't create new insurance rules from scratch. Instead, it **borrows** (or 'applies') the Commonwealth's *Insurance Contracts Act 1984* and makes it law in New South Wales for certain types of insurance.\n\n**What it does:**\n- **Takes federal insurance law and applies it at the state level** for 'State insurance' — that's insurance entered into by the NSW Government or where the State is a joint insurer with another company.\n- **Lets the NSW Governor make regulations** to modify how those federal rules apply, or to exclude certain parts.\n- **Specifically excludes** two sections of the federal Act (sections 5 and 9(2)) from applying.\n- **Binds the Crown** — meaning the NSW Government itself must follow these insurance rules, though it can't be prosecuted criminally.\n- **Sets up enforcement** — offences under the applied federal law can be prosecuted in NSW courts (Local Court or Supreme Court), with caps on fines in the Local Court.\n- **Protects GIO's insurance funds administration business** — this specific government insurance activity is carved out from the applied rules, even after privatisation.\n- **Allows extension to financial services law** — regulations can also apply parts of the federal *Corporations Act 2001* (Chapter 7 on financial services) to State insurance matters.\n\n**Who it affects:**\n- The NSW Government and its agencies when they buy insurance or act as insurers.\n- Private insurers who enter joint insurance arrangements with the State.\n- The Government Insurance Office (GIO) and its successors regarding certain fund administration activities.\n\n**Why it matters:**\nWithout this Act, there would be a **gap in the law**. Federal insurance legislation generally covers private insurance, but when the NSW Government itself enters insurance contracts, that's 'State insurance' under the Constitution — an area where the Commonwealth can't directly legislate. This Act bridges that gap by 'importing' the federal rules so that government insurance contracts have the same consumer protections and legal standards as private ones."}},"importantCases":[],"_links":{"self":"/api/acts/insurance-application-of-laws-act-1986","history":"/api/acts/insurance-application-of-laws-act-1986/history","analysis":"/api/acts/insurance-application-of-laws-act-1986/analysis","conflicts":"/api/acts/insurance-application-of-laws-act-1986/conflicts","importantCases":"/api/acts/insurance-application-of-laws-act-1986/important-cases","documents":"/api/acts/insurance-application-of-laws-act-1986/documents"}}