11Liability for conduct of agents and employees

##### 11 Liability for conduct of agents and employees (1) This section applies to any conduct of an employee or agent of an insurer: (a) on which a person in the circumstances of the insured or intending insured could reasonably be expected to rely; and (b) on which the insured or intending insured in fact relied in good faith. (1A) An insurer is responsible, as between the insurer and the insured or intending insured, for the conduct of an employee of the insurer in relation to any matter relating to insurance, whether or not the employee acted within the scope of his or her employment. (1B) If a person is the agent of one insurer only, the insurer is responsible, as between the insurer and the insured or intending insured, for the conduct of the agent in relation to any matter relating to insurance, whether or not the agent acted within the scope of the authority granted by the insurer. (1C) If: (a) a person who is the agent of more than one insurer is the agent of one insurer only in respect of a particular class of insurance business; and (b) the person engages in the conduct in relation to any matter relating to that class of insurance business; the insurer who granted the agency agreement in respect of that class of insurance business is responsible for the conduct, as between the insurer and the insured or intending insured, whether or not the agent has acted within the scope of the authority granted by the insurer. (1D) If: (a) a person is the agent of more than one insurer in respect of a particular class of insurance business; and (b) the person engages in the conduct in relation to any matter relating to that class of insurance; the insurers are jointly and severally responsible for the conduct, as between themselves and the insured or intending insured, if the agent has acted beyond the scope of the authority granted by any of the insurers. (1E) If: (a) a person is the agent of more than one insurer in respect of a particular class of insurance business; and (b) the person engages in the conduct in relation to a matter relating to that class; and (c) the person, in so engaging, has acted within the scope of the authority granted by one only of those insurers; that insurer is responsible for the conduct, as between the insurer referred to in paragraph (c) and the insured or intending insured. (1F) If: (a) a person is the agent of more than one insurer in respect of a particular class of insurance business; and (b) the person engages in the conduct in relation to a matter relating to that class; and (c) the person, in so engaging, has acted within the scope of the authority granted by some only of those insurers; the insurers referred to in paragraph (c) are jointly and severally responsible for the conduct, as between themselves and the insured or intending insured. (1G) If: (a) a person is the agent of more than one insurer; and (b) the person engages in the conduct in relation to any matter relating to a class of insurance business in which the person is not the agent of any of those insurers; the insurers are jointly and severally liable for the conduct, as between themselves and the insured or intending insured, despite the fact that the agent acted outside the scope of the authority granted by any of the insurers. (1H) If: (a) a person (the principal agent) is the agent of an insurer; and (b) the principal agent appoints a second person (the sub‑agent) to act as agent of the principal agent; then, for the purpose of determining the ultimate responsibility of the insurer under this section, the actions of the sub‑agent are to be taken to be the actions of the principal agent: (c) whether the agency agreement entered into between the principal agent and the insurer permitted or forbade the principal agent to appoint the sub‑agent; and (d) whether or not the sub‑agent acted within the scope of his or her authority. (1J) If: (a) a person is the agent of at least one insurer in respect of life insurance business; and (b) the person is the agent of at least one other insurer in respect of another class of insurance business (general insurance business); the provisions of this section do not operate: (c) if the person engages in the conduct in relation to life insurance business—so as to make any insurer referred to in paragraph (b) responsible for the conduct; and (d) if the person engages in conduct in relation to general insurance business—so as to make any insurer referred to in paragraph (a) responsible for the conduct. (1K) If: (a) a person is the agent of more than one insurer in respect of a particular class of insurance business; and (b) the person engages in the conduct in relation to a matter relating to that class; and (c) any one or more of the insurers enters or enter into a contract of insurance as a result of the conduct; then, for the purposes of this section, the agent is taken, in respect of the conduct, to have acted within the scope of the authority granted by the insurer or each insurer who so entered into a contract of insurance. (2) The responsibility of an insurer under subsection (1A), (1B), (1C), (1D), (1E), (1F), (1G) or (1H) extends so as to make the insurer liable to an insured or intending insured in respect of any loss or damage suffered by the insured or intending insured as a result of the conduct of the agent or employee. (3) Subsections (1A), (1B), (1C), (1D), (1E), (1F), (1G), (1H) and (1J) and (2) do not affect any liability of an agent or employee of an insurer to an insured or intending insured. (4) An agreement, in so far as it purports to alter or restrict the operation of subsection (1A), (1B), (1C), (1D), (1E), (1F), (1G), (1H), (1J) or (2), is void. (5) An insurer shall not make, or offer to make, an agreement that is, or would be, void by reason of the operation of subsection (4). Penalty: 150 penalty units.