17Disclosure by persons acting under binders or agency agreements in respect of claims

##### 17 Disclosure by persons acting under binders or agency agreements in respect of claims (1) An insurance intermediary who intends to act under a binder in dealing with or settling a claim under a contract of insurance must not deal with or settle the claim on behalf of the intermediary’s principal unless the intermediary has first clearly informed the insured that, in dealing with or settling the claim, the intermediary will be acting under an authority given to the intermediary by the insurer to deal with or settle the claim and that the intermediary will be dealing with or settling the claim 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 agency agreement (other than a binder) with an insurer in dealing with or settling a claim under a contract of insurance must not deal with or settle the claim on behalf of the insurer unless the broker has first clearly informed the insured that, in dealing with or settling the claim, the broker: (a) will be acting under an authority given to the broker by the insurer to deal with or settle the claim; and (b) will be dealing with or settling the claim as agent of the insurer and not of the insured. Penalty: 60 penalty units. (2) A settlement of a claim made in contravention of subsection (1) or (1A) 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.