16Disclosure by persons acting under authorities in respect of insurance contracts

##### 16 Disclosure by persons acting under authorities in respect of insurance contracts (1) An insurance intermediary who intends to act under a binder in effecting a contract of insurance on behalf of the intermediary’s principal must: (a) subject to paragraph (b), clearly inform the intending insured, before the intermediary enters into the contract, that, in effecting the contract, the intermediary will be acting under an authority given to the intermediary by the insurer to effect the contract and that the intermediary will be effecting the contract as agent of the insurer and not of the intending insured; or (b) if it is not practicable for the intermediary to comply with paragraph (a), clearly inform the insured, as soon as is reasonably practicable after the intermediary has effected the contract, that, in effecting the contract, the intermediary acted under an authority given to the intermediary by the insurer to effect the contract and that the intermediary effected the contract as agent of the insurer and not of the insured. Penalty: 60 penalty units. (1A) A registered insurance broker who intends to act under an agreement of a kind referred to in section 10 in arranging a contract of insurance as agent for an insurer shall: (a) subject to paragraph (b), clearly inform the intending insured, before the broker arranges the contract, that, in arranging the contract, the broker will be acting under an authority given by the insurer to arrange the contract and that the broker will be arranging the contract as agent of the insurer and not of the intending insured; or (b) if it is not practicable to comply with paragraph (a), clearly inform the insured, as soon as is reasonably practicable after the broker has arranged the contract, that, in arranging the contract, the broker acted under an authority given by the insurer to arrange the contract and that the broker arranged the contract as agent of the insurer and not of the insured. Penalty: 60 penalty units. (2) A contract made in contravention of this section is voidable at the option of the insured, subject to: (a) the rights of parties acquired without notice and for good or valuable consideration; and (b) compliance with the principles of common law and of equity with respect to the avoidance of contracts.