This Act sets targeted rules governing certain insurance practices — assignments of fire policies, reinsurance of marine risks, insurer joinder and examination rights in litigation, judicial discretion to excuse policy breaches, limits on voiding contracts for misrepresentation, constraints on exclusions and arbitration clauses, and allocation of evidentiary burdens.
It affects insurers, insureds, courts and secondary‑market participants by shifting litigation tools, proof burdens and transferability, thereby changing incentives for underwriting, claims handling and dispute strategy.
The Insurance Act 1902 (NSW) operates as a supplementary statute that overlays specific procedural, evidentiary and fairness rules onto insurance contracts governed by New South Wales law. Its current operative provisions fall into four clusters.
First, Part 4 (ss 14–16) continues the nineteenth-century policy of facilitating the assignment of fire insurance policies. Section 14(1) permits assignment by endorsement on the policy itself provided the insurer consents in writing. The statutory form of words set out in s 14(2) is not mandatory but illustrative. Once assigned in accordance with these formalities, s 15 entitles the assignee to sue in their own name while preserving all defences the insurer would have had against the original insured.
Second, s 17 preserves the ability to reinsure marine risks notwithstanding the prohibition that once existed under the Imperial Act 19 Geo II c 37. The provision now sits alongside the Commonwealth Marine Insurance Act 1909 (Cth) and is largely declaratory.
Third, Part 5A (inserted in 1991) contains a significant procedural innovation in s 17A. Where civil proceedings have been brought on a claim that an insurer believes was not made in good faith, the insurer may seek to be joined and, once joined, may call and examine any witness (including a defendant) about the occurrence itself, any other claim the witness has made, and the witness’s credibility (s 17A(2)–(3)). With leave, the insurer may cross-examine and lead contradictory evidence (s 17A(4)). The rights are expressed to be additional to any rights under other laws and prevail over s 53 of the Evidence Act 1898 (s 17A(5)–(6)). The section applies equally when the insurer is itself the defendant and extends to proceedings commenced before or after its enactment (s 17A(7), (9)). It does not apply to motor accident claims under the , or (s 17A(8)).
Current sections
Direct links to the current provisions in Insurance Act 1902.
s 1: Am 1938 No 21, sec 2 (b); 1974 No 105, sec 6 (a); 1999 No 31, Sch 5.51.
2
Repeals
2 Repeals
2 Repeals
The Acts mentioned in Schedule 1 are, to the extent therein expressed, hereby repealed.
s 2: Am 1995 No 99, Sch 4.
Part 2
Part 2
Parts 2, 3
3–13 (Repealed)
pt 2: Rep 2009 No 56, Sch 5.
s 3: Am 1999 No 4, Sch 2.14 [1]. Rep 2009 No 56, Sch 5.
s 4: Am 1917 No 23, sec 2. Rep 2009 No 56, Sch 5.
ss 5–7: Rep 2009 No 56, Sch 5.
s 8: Am 1999 No 4, Sch 2.14 [2] [3]. Rep 2009 No 56, Sch 5.
s 9: Am 1937 No 35, Second Sch. Rep 2009 No 56, Sch 5.
s 10: Am 1999 No 4, Sch 2.14 [4]. Rep 2009 No 56, Sch 5.
s 10A: Ins 1938 No 21, sec 2 (a). Rep 2009 No 56, Sch 5.
pt 3 (ss 11–13): Rep 2009 No 56, Sch 5.
Part 4
Fire insurance policies assignment
Part 4 Fire insurance policies assignment
Part 4 Fire insurance policies assignment
14
Assignment of fire policy
14 Assignment of fire policy
14 Assignment of fire policy
(1) It shall be lawful to make an assignment of a fire policy by endorsement on such policy with the consent in writing of the company or person issuing the same endorsed on such policy.
(2) Such assignment shall be in the words or to the effect following, namely, “I, AB, of, etc, do hereby assign unto CD the within policy of insurance on [here describe property insured, etc] In witness whereof, etc”.
15
Assignee may sue in his or her own name
15 Assignee may sue in his or her own name
15 Assignee may sue in his or her own name
Whenever a fire policy has been assigned in such manner and with such consent as aforesaid so as to pass the beneficial interest in such policy to any person entitled to the property thereby insured the assignee of such policy shall be entitled to sue thereon in the assignee’s own name. The defendant in any action shall be entitled to make any defence which the defendant would have been entitled to make if the said action had been brought before such assignment in the name of the person by whom or on whose account the policy sued upon was effected.
16
Definition
16 Definition
16 Definition
For the purposes and in the construction of sections 14 and 15, the expression fire policy means any instrument by which the payment of money is assured or secured on the happening of any of the contingencies in the nature of loss or damage to property by fire named in such instrument.
Part 5
Re-Insurance—marine risks
Part 5 Re-Insurance—marine risks
Part 5 Re-Insurance—marine risks
17
Re-insurance of marine risks may be made
17 Re-insurance of marine risks may be made
17 Re-insurance of marine risks may be made
Notwithstanding anything contained in the Imperial Act passed in the nineteenth year of the reign of King George the Second, chapter thirty-seven, it shall be lawful to make re-insurance upon any ship or vessel, or upon any goods, merchandise, or other property on board any ship or vessel, or upon the freight of any ship or vessel, or upon any other interest in or relating to any ship or vessel which may lawfully be insured.
Rights of insurer to challenge evidence where false claim alleged
17A Rights of insurer to challenge evidence where false claim alleged
17A Rights of insurer to challenge evidence where false claim alleged
(1) If:
(a) civil proceedings have been commenced against a person in respect of a claim (being a claim in respect of which the person is or may be indemnified under a contract of insurance), and
(b) the person’s insurer has given the plaintiff particulars alleging that the claim has not been made in good faith,
the insurer may apply to the court to be joined as a party to the proceedings.
(2) If the court gives the insurer leave to be joined as a party, the insurer may call as a witness any person (including a defendant) able to give evidence relating to the occurrence out of which the claim arose or evidence of other matters relating to the claim.
(3) The insurer may examine the witness as to the occurrence out of which the claim arose and may also, with the leave of the court, examine the witness as to:
(a) any other claim in which the witness was involved, and
(b) the credibility of the witness.
(4) If the court gives leave to do so, the insurer may:
(a) cross-examine the witness, and
(b) lead other evidence to refute the evidence given by the witness,
as to any or all of the matters as to which the insurer might have examined the witness under subsection (3).
(5) Any right to examine or cross-examine a witness arising under this section is additional to and not in diminution of any right to examine or cross-examine the person arising under any other law.
(6) This section applies despite section 53 of the Evidence Act 1898.
(7) This section applies to an insurer as a defendant in relation to a claim (being a claim referred to in subsection (1)) in the same way as this section applies to an insurer who is granted leave to be joined as a party.
(9) This section applies to civil proceedings commenced before or after the commencement of this section.
s 17A: Ins 1991 No 46, sec 3. Am 1999 No 41, Sch 4.6; 2017 No 10, Sch 5.6.
Part 6
Miscellaneous
Part 6 Miscellaneous
Part 6 Miscellaneous
pt 6: Ins 1974 No 105, sec 6 (b).
18
Powers of court in relation to insurance contracts
18 Powers of court in relation to insurance contracts
18 Powers of court in relation to insurance contracts
(1) In any proceedings taken in a court in respect of a difference or dispute arising out of a contract of insurance, if it appears to the court that a failure by the insured to observe or perform a term or condition of the contract of insurance may reasonably be excused on the ground that the insurer was not prejudiced by the failure, the court may order that the failure be excused.
(2) Where an order of the nature referred to in subsection (1) has been made, the rights and liabilities of all persons in respect of the contract of insurance concerned shall be determined as if the failure the subject of the order had not occurred.
s 18: Ins 1974 No 105, sec 6 (b).
18A
Misrepresentation and non-disclosure
18A Misrepresentation and non-disclosure
18A Misrepresentation and non-disclosure
A contract of insurance that is entered into, reinstated or renewed after the commencement of this section is not void, voidable or otherwise rendered unenforceable:
(a) by reason only of a false or misleading statement made in or in connection with the contract or a proposal, offer or document that led to the entering into, reinstating or renewing of the contract unless the statement was material to the insurer in relation to the contract of insurance and:
(i) the statement was fraudulent, or
(ii) the insured knew or a reasonable person in the insured’s circumstances ought to have known that the statement was material to the insurer in relation to the contract of insurance, or
(b) by reason only of an omission of matter from the contract or a proposal, offer or document that led to the entering into, reinstating or renewing of the contract unless the matter omitted was material to the insurer in relation to the contract of insurance and:
(i) the omission was deliberate, or
(ii) the insured knew or a reasonable person in the insured’s circumstances ought to have known that matter material to the insurer in relation to the contract of insurance had been omitted.
s 18A: Ins 1983 No 97, Sch 1 (1).
18B
Limitation on exclusion clauses
18B Limitation on exclusion clauses
18B Limitation on exclusion clauses
(1) Where by or under the provisions of a contract of insurance entered into, reinstated or renewed after the commencement of this section:
(a) the circumstances in which the insurer is bound to indemnify the insured are so defined as to exclude or limit the liability of the insurer to indemnify the insured on the happening of particular events or on the existence of particular circumstances, and
(b) the liability of the insurer has been so defined because the happening of those events or the existence of those circumstances was in the view of the insurer likely to increase the risk of loss occurring,
the insured shall not be disentitled to be indemnified by the insurer by reason only of those provisions of the contract of insurance if, on the balance of probability, the loss in respect of which the insured seeks to be indemnified was not caused or contributed to by the happening of those events or the existence of those circumstances, unless in all the circumstances it is not reasonable for the insurer to be bound to indemnify the insured.
(2) The onus of proving for the purposes of subsection (1) that, on the balance of probability, loss in respect of which an insured seeks to be indemnified was not caused or contributed to by the happening of particular events or the existence of particular circumstances is on the insured.
s 18B: Ins 1983 No 97, Sch 1 (1).
19
Insured not bound to arbitrate
19 Insured not bound to arbitrate
19 Insured not bound to arbitrate
A provision in a contract of insurance or other contract or agreement, being a provision with respect to the submission to arbitration of any matter arising out of the contract of insurance, does not bind the insured except where the provision is contained in a contract or agreement, entered into after a difference or dispute has arisen between the insurer and the insured, providing for the submission to arbitration of that difference or dispute.
s 19: Ins 1974 No 105, sec 6 (b).
20
Repairs to motor vehicle carried out by insurer
20 Repairs to motor vehicle carried out by insurer
20 Repairs to motor vehicle carried out by insurer
In any proceedings arising out of a difference or dispute with respect to:
(a) the materials used in carrying out repairs, or
(b) the manner of carrying out repairs,
to a motor vehicle, which repairs were carried out by the insurer under a policy of insurance relating to that motor vehicle or by a company that is a subsidiary or by a related body corporate within the meaning of the Corporations Act 2001 of the Commonwealth of the insurer, the onus lies upon the insurer of proving that the materials used were proper materials or that the repairs were properly carried out, as the case may be, notwithstanding any acknowledgment as to the materials or the manner of carrying out the repairs given by the insured.
s 20: Ins 1974 No 105, sec 6 (b). Am 1986 No 16, Sch 23; 2001 No 34, Sch 2.27.
21
Exemption
21 Exemption
21 Exemption
(1) The Governor may make regulations not inconsistent with this Act exempting, subject to such terms and conditions as are specified in the regulations:
(a) persons belonging to any class of persons, or
(b) contracts of insurance included in any class of contracts of insurance,
specified in the regulations from all or any of the provisions of this Part as may be so specified in respect of that class of persons or that class of contracts of insurance.
(2) Without limiting subsection (1), sections 18A and 18B do not apply to or in respect of:
s 21: Ins 1974 No 105, sec 6 (b). Am 1983 No 97, Sch 1 (2); 1987 No 79, Sch 1; 1987 No 111, Sch 1; 2005 No 98, Sch 3.33; 2015 No 7, Sch 2.23.
22
Savings and transitional provisions
22 Savings and transitional provisions
22 Savings and transitional provisions
Schedule 2 has effect.
s 22: Ins 1995 No 99, Sch 4.
Schedule 1
Repeals
Schedule 1 Repeals
Schedule 1 Repeals
sch 1, hdg: Subst 1995 No 99, Sch 4.
| Reference to Act | Title or short title | Extent of repeal |
| 26 Vic No 13 | Life Assurance Encouragement Act of 1862 | The whole Act |
| 29 Vic No 19 | An Act to repeal the prohibition on reinsurance of Marine Risks | The whole Act |
| 51 Vic No 13 | Assignees of Fire Insurance Policies Enabling Act 1887 | The whole Act |
| 56 Vic No 11 | Married Women’s Property Act 1893 | The unrepealed portion of s 13 and s 14 |
| 59 Vic No 13 | Lost Policies Act of 1895 | The whole Act |
Schedule 2
Savings and transitional provisions
Schedule 2 Savings and transitional provisions
Schedule 2 Savings and transitional provisions
(Section 22)
sch 2: Ins 1995 No 99, Sch 4. Am 1999 No 4, Sch 2.14 [5].
s 1: Am 1938 No 21, sec 2 (b); 1974 No 105, sec 6 (a); 1999 No 31, Sch 5.51.
2 Repeals
2 Repeals
2 Repeals
The Acts mentioned in Schedule 1 are, to the extent therein expressed, hereby repealed.
s 2: Am 1995 No 99, Sch 4.
Part 2
Parts 2, 3
3–13 (Repealed)
pt 2: Rep 2009 No 56, Sch 5.
s 3: Am 1999 No 4, Sch 2.14 [1]. Rep 2009 No 56, Sch 5.
s 4: Am 1917 No 23, sec 2. Rep 2009 No 56, Sch 5.
ss 5–7: Rep 2009 No 56, Sch 5.
s 8: Am 1999 No 4, Sch 2.14 [2] [3]. Rep 2009 No 56, Sch 5.
s 9: Am 1937 No 35, Second Sch. Rep 2009 No 56, Sch 5.
s 10: Am 1999 No 4, Sch 2.14 [4]. Rep 2009 No 56, Sch 5.
s 10A: Ins 1938 No 21, sec 2 (a). Rep 2009 No 56, Sch 5.
pt 3 (ss 11–13): Rep 2009 No 56, Sch 5.
Part 4 Fire insurance policies assignment
Part 4 Fire insurance policies assignment
Part 4 Fire insurance policies assignment
14 Assignment of fire policy
14 Assignment of fire policy
14 Assignment of fire policy
(1) It shall be lawful to make an assignment of a fire policy by endorsement on such policy with the consent in writing of the company or person issuing the same endorsed on such policy.
(2) Such assignment shall be in the words or to the effect following, namely, “I, AB, of, etc, do hereby assign unto CD the within policy of insurance on [here describe property insured, etc] In witness whereof, etc”.
15 Assignee may sue in his or her own name
15 Assignee may sue in his or her own name
15 Assignee may sue in his or her own name
Motor Accidents Act 1988
Motor Accidents Compensation Act 1999
Motor Accident Injuries Act 2017
Fourth, and most frequently litigated, Part 6 (ss 18–21) supplies a suite of consumer-protection and procedural rules. Section 18(1) empowers a court, in any proceeding arising out of a contract of insurance, to excuse an insured’s failure to observe a term or condition if the failure “may reasonably be excused on the ground that the insurer was not prejudiced”. Once excused, the contract is read as if the failure had never occurred (s 18(2)). Section 18A prevents a contract from being voided for misrepresentation or non-disclosure unless the statement or omission was both material and either fraudulent/deliberate or made with knowledge (actual or constructive) that it was material. Section 18B limits the operation of exclusion clauses that are inserted because the excluded event would increase risk: the insured remains entitled to indemnity if, on the balance of probabilities, the loss was not caused or contributed to by the excluded event, unless it would be unreasonable in all the circumstances for the insurer to pay (s 18B(1)). The onus of proving lack of causation lies on the insured (s 18B(2)).
Section 19 renders arbitration clauses in insurance contracts unenforceable unless the agreement to arbitrate is made after the dispute has arisen. Section 20 reverses the onus of proof in disputes about the quality of repairs to motor vehicles carried out by the insurer or its related body corporate. Section 21 empowers the Governor to exempt classes of persons or contracts from the Part 6 provisions and lists specific statutory exemptions for marine, life, compulsory third-party motor and workers compensation insurance.
Schedule 2 contains transitional rules that apply the 1983 amendments to pre-commencement statements and omissions, and preserve the position for estates of persons who died before the 1999 property-relationships amendments.
Taken together, the Act does not codify the whole of insurance law; rather it carves out discrete areas in which the common-law position is altered in favour of insureds while giving insurers enhanced forensic tools to combat fraud.
Who it affects
The Act affects four main groups.
Insurers licensed or carrying on business in New South Wales are directly bound. Any policy issued, renewed or reinstated after the relevant commencement dates is subject to ss 18, 18A, 18B, 19 and 20. Foreign insurers reinsuring Australian risks may also be caught where the proper law of the contract is New South Wales.
Insureds and assignees of fire policies are the primary beneficiaries. Any individual or corporation holding a fire policy that has been validly assigned under s 14 can sue in their own name. Consumers and small businesses taking out home, contents, public liability or commercial property insurance obtain the protections in ss 18–18B.
Litigants and witnesses in proceedings involving disputed insurance claims fall under s 17A. Plaintiffs, defendants, and any third party able to give evidence about the occurrence or about the claimant’s credit may be examined at the instance of the insurer once the insurer has pleaded lack of good faith.
Finally, the courts of New South Wales are given expanded discretion under s 18 and procedural powers under s 17A. The Supreme Court and District Court in particular must apply the balance-of-probabilities test in s 18B(2) and decide whether it is “reasonable” for the insurer to be bound despite an exclusion.
The Act does not bind the Commonwealth or its instrumentalities directly, nor does it apply to contracts regulated exclusively by Commonwealth statutes such as the Insurance Contracts Act 1984 (Cth) where that Act covers the field. However, because many general insurance contracts retain a New South Wales proper-law clause, the Insurance Act 1902 continues to have practical reach.
Key duties and rights
The statute creates a mixture of positive rights, negative protections and reversed onuses.
Insureds have the right to assign fire policies (s 14), to sue in their own name after assignment (s 15), and to have minor breaches excused where the insurer suffers no prejudice (s 18). They enjoy a statutory shield against avoidance for innocent misrepresentation or non-disclosure (s 18A) and a qualified immunity from the operation of risk-increasing exclusion clauses (s 18B(1)). Insureds cannot be compelled to arbitrate pre-dispute (s 19) and, in repair disputes, benefit from a reversed onus (s 20).
Insurers gain powerful evidentiary rights under s 17A. Once they plead lack of good faith and obtain leave to be joined, they may examine any witness on the occurrence, on other claims, and on credibility, and may, with leave, cross-examine and call rebuttal evidence. These rights exist in addition to ordinary rights of cross-examination and prevail over the old Evidence Act 1898 restriction.
Both parties are subject to the court’s discretion under s 18. The insured must still prove that the failure caused no prejudice; the court then decides whether the failure “may reasonably be excused”. In s 18B the insured bears the legal onus of proving, on the balance of probabilities, that the excluded circumstance did not cause or contribute to the loss.
The Governor holds a regulatory power to exempt classes of persons or contracts (s 21(1)). The exemptions already listed in s 21(2) for marine, life, compulsory third-party and legal-practice insurance operate automatically.
Penalties and enforcement
The Insurance Act 1902 is not a penal statute. It contains no offence-creating provisions and no civil-penalty regime. Enforcement occurs exclusively through private litigation and declaratory or coercive orders.
Breach of the assignment formalities in s 14 may simply render the assignment ineffective at common law, leaving the assignee without standing. Failure to comply with s 19 does not attract damages but renders the arbitration clause void as against the insured.
The principal remedies are:
declaratory relief that a breach has been excused under s 18;
orders preventing reliance on an exclusion clause under s 18B;
refusal to stay proceedings in favour of arbitration;
costs orders where an insurer unsuccessfully opposes joinder under s 17A or pursues an unmeritorious fraud allegation.
Because s 17A(3)–(4) permits wide-ranging cross-examination on credit and other claims, insurers who over-reach risk adverse costs orders or findings of unreasonableness that may feed into unfair-contracts claims under the Australian Securities and Investments Commission Act 2001 (Cth) or the Fair Trading Act 1987 (NSW).
How it interacts with other laws
The Act is expressly subordinated to several more modern regimes. Section 17A(8) excludes its operation from motor-accident claims under three successive statutes. Section 21(2) excludes marine insurance, life insurance, workers compensation, and certain legal-practice indemnity contracts.
Section 17A(6) states that the section applies “despite section 53 of the Evidence Act 1898”, thereby overriding the old rule against questioning a witness on collateral credit matters. The provision must now be read with the Evidence Act 1995 (NSW), which contains its own credibility and tendency rules; courts have treated s 17A as expanding rather than contradicting the uniform evidence law.
The reference in s 20 to “related body corporate within the meaning of the Corporations Act 2001 (Cth)” incorporates the Corporations Law definition by reference, ensuring that corporate-group structures are captured even if the repairer is not the insurer itself.
Schedule 2 cl 3 provides that the 1999 amendments (removing gendered language and aligning with the Property (Relationships) Act 1984) do not affect estates of persons who died before the amendments. This interacts with the Succession Act 2006 (NSW) and the general law of estates.
Because the Insurance Contracts Act 1984 (Cth) now covers most consumer insurance, the Insurance Act 1902 operates as a gap-filler for contracts that fall outside the Commonwealth Act or where New South Wales law is the proper law and the Commonwealth Act does not exclude State operation.
Recent changes and why
The most recent substantive amendment was in 2017 (by the Motor Accident Injuries Act 2017 Sch 5.6) which updated the list of excluded motor-accident statutes in s 17A(8) and s 21(2). That change was consequential upon the introduction of the new no-fault motor-accident scheme and was designed to maintain the bright-line exclusion of statutory benefits claims from the fraud-testing machinery in s 17A.
The 2015 amendment (Legal Profession Uniform Law) updated the list of exempted professional-indemnity schemes in s 21(2). Earlier, the 2005 and 2001 amendments simply updated cross-references to the Workers Compensation Act 1987 and the Corporations Act 2001.
No major policy-driven rewrite has occurred since the 1983 amendments that introduced ss 18A and 18B. Those changes were a direct response to the insurance crises of the early 1980s and were intended to prevent insurers from relying on technical non-disclosures or overly broad exclusions. The 1991 insertion of s 17A was prompted by perceived difficulties insurers faced in proving fraud in “soft-tissue” and exaggerated personal-injury claims.
Court challenges and controversies
Because the Act is procedural and remedial, reported cases tend to cluster around three issues.
First, the scope of “prejudice” under s 18. Courts have held that prejudice need not be monetary; loss of an opportunity to investigate promptly can suffice, yet the onus remains on the insurer to prove actual prejudice before the discretion is engaged. The phrase “may reasonably be excused” has been read as conferring a broad remedial discretion.
Second, the operation of s 18B. The leading authorities emphasise that the insured’s onus under s 18B(2) is a legal onus on the balance of probabilities. Where the excluded event is “use of an unroadworthy vehicle”, insurers have succeeded where the insured cannot negative contribution; they have failed where the loss is shown to be unrelated (for example, theft rather than collision).
Third, the breadth of s 17A. Insurers have attempted to use the section to conduct wide-ranging “fishing” examinations about unrelated claims. Courts have granted leave restrictively, requiring a pleaded case of fraud and some evidentiary foundation before permitting cross-examination on credit or other claims. The interaction with the Civil Procedure Act 2005 overriding-purpose provisions has produced ongoing disputes about costs and case-management.
No constitutional challenge has succeeded. The High Court has not directly considered the Act, but intermediate appellate courts have consistently upheld its validity as a law regulating the incidents of contracts made within the State.
Gotchas
Most practitioners assume that the Insurance Contracts Act 1984 (Cth) has wholly supplanted State law. In reality, many commercial property, public-liability and professional-indemnity policies still attract the Insurance Act 1902 because they are not “contracts of insurance” within the defined scope of the Commonwealth Act or because the parties have chosen New South Wales law.
A second trap is the reversed onus in s 20. Even an insured’s signed acknowledgment that repairs were satisfactory does not shift the burden; the insurer must still prove proper materials and workmanship if the insured disputes quality.
Section 18A(2)(ii) uses the objective “reasonable person in the insured’s circumstances” test. Courts have interpreted this as importing the insured’s actual knowledge, occupation and experience, not a purely hypothetical reasonable consumer. Insurers who plead only a bare failure to disclose therefore risk an early strike-out.
The transitional provision in Schedule 2 cl 2(1) applies the 1983 amendments to pre-1984 statements. Many older files still contain proposal forms signed before 1 April 1984; unwary claims handlers assume the common-law uberrimae fidei rule still applies when in fact s 18A governs.
Finally, s 17A(7) applies the same expanded examination rights when the insurer is the defendant. Plaintiff lawyers sometimes overlook that an insurer defending a direct action can still invoke the section, producing an unpleasant forensic reversal for claimants who expected to control the witness box.
How to comply
Insurers should:
Include a clear written consent mechanism on policy documents so that assignments under s 14 can be executed without later dispute.
When pleading lack of good faith, particularise the allegation with sufficient precision to satisfy a court that joinder under s 17A is warranted; boilerplate fraud pleas are routinely refused.
Before relying on an exclusion clause caught by s 18B, obtain and preserve evidence that the excluded circumstance actually contributed to the loss; the insured’s s 18B(2) onus is not onerous if the insurer has no contrary evidence.
In repair authorisations, avoid language suggesting the insured waives the s 20 onus; the statute overrides any such acknowledgment.
Maintain separate claims files for motor-accident statutory benefits so that s 17A material is not inadvertently mixed with excluded proceedings.
Insureds and their advisers should:
Document any assignment of a fire policy strictly in accordance with s 14(2) and obtain the insurer’s written consent contemporaneously.
When a policy breach is discovered, notify the insurer immediately and invite it to state whether it claims prejudice; early notification strengthens a later s 18 application.
In responding to a s 18B exclusion, assemble evidence (expert or lay) that negatives causation on the balance of probabilities; silence is fatal.
Resist pre-dispute arbitration clauses by pleading s 19; courts routinely decline stays.
In motor-repair disputes, put the insurer to proof under s 20; a statutory declaration from the repairer is insufficient.
Both sides should keep the transitional provisions in mind when dealing with long-tail claims. Claims handlers should obtain legal advice before invoking s 17A because the costs consequences of an unsuccessful application can be severe. Regular training on the precise wording of ss 18, 18A and 18B remains the cheapest compliance tool available under this deceptively short but persistently relevant statute.
Whenever a fire policy has been assigned in such manner and with such consent as aforesaid so as to pass the beneficial interest in such policy to any person entitled to the property thereby insured the assignee of such policy shall be entitled to sue thereon in the assignee’s own name. The defendant in any action shall be entitled to make any defence which the defendant would have been entitled to make if the said action had been brought before such assignment in the name of the person by whom or on whose account the policy sued upon was effected.
16 Definition
16 Definition
16 Definition
For the purposes and in the construction of sections 14 and 15, the expression fire policy means any instrument by which the payment of money is assured or secured on the happening of any of the contingencies in the nature of loss or damage to property by fire named in such instrument.
Part 5 Re-Insurance—marine risks
Part 5 Re-Insurance—marine risks
Part 5 Re-Insurance—marine risks
17 Re-insurance of marine risks may be made
17 Re-insurance of marine risks may be made
17 Re-insurance of marine risks may be made
Notwithstanding anything contained in the Imperial Act passed in the nineteenth year of the reign of King George the Second, chapter thirty-seven, it shall be lawful to make re-insurance upon any ship or vessel, or upon any goods, merchandise, or other property on board any ship or vessel, or upon the freight of any ship or vessel, or upon any other interest in or relating to any ship or vessel which may lawfully be insured.
17A Rights of insurer to challenge evidence where false claim alleged
17A Rights of insurer to challenge evidence where false claim alleged
17A Rights of insurer to challenge evidence where false claim alleged
(1) If:
(a) civil proceedings have been commenced against a person in respect of a claim (being a claim in respect of which the person is or may be indemnified under a contract of insurance), and
(b) the person’s insurer has given the plaintiff particulars alleging that the claim has not been made in good faith,
the insurer may apply to the court to be joined as a party to the proceedings.
(2) If the court gives the insurer leave to be joined as a party, the insurer may call as a witness any person (including a defendant) able to give evidence relating to the occurrence out of which the claim arose or evidence of other matters relating to the claim.
(3) The insurer may examine the witness as to the occurrence out of which the claim arose and may also, with the leave of the court, examine the witness as to:
(a) any other claim in which the witness was involved, and
(b) the credibility of the witness.
(4) If the court gives leave to do so, the insurer may:
(a) cross-examine the witness, and
(b) lead other evidence to refute the evidence given by the witness,
as to any or all of the matters as to which the insurer might have examined the witness under subsection (3).
(5) Any right to examine or cross-examine a witness arising under this section is additional to and not in diminution of any right to examine or cross-examine the person arising under any other law.
(6) This section applies despite section 53 of the Evidence Act 1898.
(7) This section applies to an insurer as a defendant in relation to a claim (being a claim referred to in subsection (1)) in the same way as this section applies to an insurer who is granted leave to be joined as a party.
(8) This section does not apply to proceedings in respect of a claim under the Motor Accidents Act 1988, the Motor Accidents Compensation Act 1999 or the Motor Accident Injuries Act 2017.
(9) This section applies to civil proceedings commenced before or after the commencement of this section.
s 17A: Ins 1991 No 46, sec 3. Am 1999 No 41, Sch 4.6; 2017 No 10, Sch 5.6.
Part 6 Miscellaneous
Part 6 Miscellaneous
Part 6 Miscellaneous
pt 6: Ins 1974 No 105, sec 6 (b).
18 Powers of court in relation to insurance contracts
18 Powers of court in relation to insurance contracts
18 Powers of court in relation to insurance contracts
(1) In any proceedings taken in a court in respect of a difference or dispute arising out of a contract of insurance, if it appears to the court that a failure by the insured to observe or perform a term or condition of the contract of insurance may reasonably be excused on the ground that the insurer was not prejudiced by the failure, the court may order that the failure be excused.
(2) Where an order of the nature referred to in subsection (1) has been made, the rights and liabilities of all persons in respect of the contract of insurance concerned shall be determined as if the failure the subject of the order had not occurred.
s 18: Ins 1974 No 105, sec 6 (b).
18A Misrepresentation and non-disclosure
18A Misrepresentation and non-disclosure
18A Misrepresentation and non-disclosure
A contract of insurance that is entered into, reinstated or renewed after the commencement of this section is not void, voidable or otherwise rendered unenforceable:
(a) by reason only of a false or misleading statement made in or in connection with the contract or a proposal, offer or document that led to the entering into, reinstating or renewing of the contract unless the statement was material to the insurer in relation to the contract of insurance and:
(i) the statement was fraudulent, or
(ii) the insured knew or a reasonable person in the insured’s circumstances ought to have known that the statement was material to the insurer in relation to the contract of insurance, or
(b) by reason only of an omission of matter from the contract or a proposal, offer or document that led to the entering into, reinstating or renewing of the contract unless the matter omitted was material to the insurer in relation to the contract of insurance and:
(i) the omission was deliberate, or
(ii) the insured knew or a reasonable person in the insured’s circumstances ought to have known that matter material to the insurer in relation to the contract of insurance had been omitted.
s 18A: Ins 1983 No 97, Sch 1 (1).
18B Limitation on exclusion clauses
18B Limitation on exclusion clauses
18B Limitation on exclusion clauses
(1) Where by or under the provisions of a contract of insurance entered into, reinstated or renewed after the commencement of this section:
(a) the circumstances in which the insurer is bound to indemnify the insured are so defined as to exclude or limit the liability of the insurer to indemnify the insured on the happening of particular events or on the existence of particular circumstances, and
(b) the liability of the insurer has been so defined because the happening of those events or the existence of those circumstances was in the view of the insurer likely to increase the risk of loss occurring,
the insured shall not be disentitled to be indemnified by the insurer by reason only of those provisions of the contract of insurance if, on the balance of probability, the loss in respect of which the insured seeks to be indemnified was not caused or contributed to by the happening of those events or the existence of those circumstances, unless in all the circumstances it is not reasonable for the insurer to be bound to indemnify the insured.
(2) The onus of proving for the purposes of subsection (1) that, on the balance of probability, loss in respect of which an insured seeks to be indemnified was not caused or contributed to by the happening of particular events or the existence of particular circumstances is on the insured.
s 18B: Ins 1983 No 97, Sch 1 (1).
19 Insured not bound to arbitrate
19 Insured not bound to arbitrate
19 Insured not bound to arbitrate
A provision in a contract of insurance or other contract or agreement, being a provision with respect to the submission to arbitration of any matter arising out of the contract of insurance, does not bind the insured except where the provision is contained in a contract or agreement, entered into after a difference or dispute has arisen between the insurer and the insured, providing for the submission to arbitration of that difference or dispute.
s 19: Ins 1974 No 105, sec 6 (b).
20 Repairs to motor vehicle carried out by insurer
20 Repairs to motor vehicle carried out by insurer
20 Repairs to motor vehicle carried out by insurer
In any proceedings arising out of a difference or dispute with respect to:
(a) the materials used in carrying out repairs, or
(b) the manner of carrying out repairs,
to a motor vehicle, which repairs were carried out by the insurer under a policy of insurance relating to that motor vehicle or by a company that is a subsidiary or by a related body corporate within the meaning of the Corporations Act 2001 of the Commonwealth of the insurer, the onus lies upon the insurer of proving that the materials used were proper materials or that the repairs were properly carried out, as the case may be, notwithstanding any acknowledgment as to the materials or the manner of carrying out the repairs given by the insured.
s 20: Ins 1974 No 105, sec 6 (b). Am 1986 No 16, Sch 23; 2001 No 34, Sch 2.27.
21 Exemption
21 Exemption
21 Exemption
(1) The Governor may make regulations not inconsistent with this Act exempting, subject to such terms and conditions as are specified in the regulations:
(a) persons belonging to any class of persons, or
(b) contracts of insurance included in any class of contracts of insurance,
specified in the regulations from all or any of the provisions of this Part as may be so specified in respect of that class of persons or that class of contracts of insurance.
(2) Without limiting subsection (1), sections 18A and 18B do not apply to or in respect of:
(a) contracts of marine insurance,
(b) contracts of life insurance, or
(c) those provisions of contracts of insurance to or in respect of which the Motor Vehicles (Third Party Insurance) Act 1942, the Workers Compensation Act 1987, Part 4.4 of the Legal Profession Uniform Law (NSW) or Part 8 of the Legal Profession Uniform Law Application Act 2014, applies.
s 21: Ins 1974 No 105, sec 6 (b). Am 1983 No 97, Sch 1 (2); 1987 No 79, Sch 1; 1987 No 111, Sch 1; 2005 No 98, Sch 3.33; 2015 No 7, Sch 2.23.
22 Savings and transitional provisions
22 Savings and transitional provisions
22 Savings and transitional provisions
Schedule 2 has effect.
s 22: Ins 1995 No 99, Sch 4.
Schedule 1 Repeals
Schedule 1 Repeals
Schedule 1 Repeals
sch 1, hdg: Subst 1995 No 99, Sch 4.
| Reference to Act | Title or short title | Extent of repeal |
| 26 Vic No 13 | Life Assurance Encouragement Act of 1862 | The whole Act |
| 29 Vic No 19 | An Act to repeal the prohibition on reinsurance of Marine Risks | The whole Act |
| 51 Vic No 13 | Assignees of Fire Insurance Policies Enabling Act 1887 | The whole Act |
| 56 Vic No 11 | Married Women’s Property Act 1893 | The unrepealed portion of s 13 and s 14 |
| 59 Vic No 13 | Lost Policies Act of 1895 | The whole Act |
Schedule 2 Savings and transitional provisions
Schedule 2 Savings and transitional provisions
Schedule 2 Savings and transitional provisions
(Section 22)
sch 2: Ins 1995 No 99, Sch 4. Am 1999 No 4, Sch 2.14 [5].
Part 1 Provisions consequent on enactment of Insurance (Amendment) Act 1983
Part 1 Provisions consequent on enactment of Insurance (Amendment) Act 1983
Part 1 Provisions consequent on enactment of Insurance (Amendment) Act 1983
1 Definition
1 Definition
1 Definition
In this Part, amending Act means the Insurance (Amendment) Act 1983.
2 Misrepresentation, non-disclosure and limitation on exclusion clauses
2 Misrepresentation, non-disclosure and limitation on exclusion clauses
2 Misrepresentation, non-disclosure and limitation on exclusion clauses
(1) Sections 18A and 18B of this Act, as amended by the amending Act, in their application to contracts of insurance entered into, reinstated or renewed after the commencement of those sections, have effect with respect to statements, omissions, events or circumstances referred to in those sections and made, occurring, happening or existing before that commencement (as well as with respect to those so referred to and made, occurring, happening or existing after that commencement).
(2) This clause is taken to have commenced on 1 April 1984 (the date of commencement of the amending Act).
(3) Subclause (1) re-enacts (with minor modification) section 4 of the amending Act. Subclause (1) is a transferred provision to which section 30A of the Interpretation Act 1987 applies.
Part 2 Provisions consequent on enactment of Property (Relationships) Legislation Amendment Act 1999
Part 2 Provisions consequent on enactment of Property (Relationships) Legislation Amendment Act 1999
Part 2 Provisions consequent on enactment of Property (Relationships) Legislation Amendment Act 1999
3 Life policies
3 Lif
This is an opening excerpt, not the complete document.