Insurance Contracts Act 1984

Part I—Preliminary

1 Short title

This Act may be cited as the Insurance Contracts Act 1984.

2 Commencement

This Act shall come into operation on a day to be fixed by Proclamation.

3 Repeals

(1) The Imperial Acts known as The Life Assurance Act, 1774, The Fires Prevention (Metropolis) Act, 1774 and The Marine Insurance Act, 1788, in their application to a contract of insurance or proposed contract of insurance to or in relation to which this Act applies, are repealed in so far as they are part of the law of the Commonwealth or of an external Territory to which this Act extends. (2) Section 8 of the Acts Interpretation Act 1901 extends to those Imperial Acts as so repealed as though they were Acts of the Parliament repealed by this Act.

4 Previous contracts

(1) Subject to subsection (2), this Act does not apply to or in relation to a contract of insurance that was entered into before the date of commencement of this Act. (2) The application of sections 32, 54 and 56 extends to and in relation to a superannuation contract (other than an individual superannuation contract) that was entered into before the date of commencement of this Act in so far as a person who becomes, on or after that date, a member of the relevant superannuation or retirement scheme is concerned.

5 Crown to be bound

(1) This Act binds the Crown in right of the Commonwealth or of a Territory in which this Act applies or to which this Act extends but does not bind the Crown in right of a State. (2) Nothing in this Act renders the Crown in right of the Commonwealth or of a Territory liable to be prosecuted for an offence arising under this Act.

6 Extension to external Territories

(1) This Act extends to Norfolk Island, the Territory of Christmas Island and the Territory of Cocos (Keeling) Islands, and to any other external Territory that is for the time being declared by Proclamation to be a Territory to which this Act extends. (2) A reference in this Act to the date of commencement of this Act is, in relation to an external Territory to which this Act extends, a reference to that date or to the date on which this Act commences so to extend, whichever is the later.

7 Effect of Act on other laws

It is the intention of the Parliament that this Act is not, except in so far as this Act, either expressly or by necessary intendment, otherwise provides, to affect the operation of any other law of the Commonwealth, the operation of law of a State or Territory or the operation of any principle or rule of the common law (including the law merchant) or of equity.

8 Application of Act

(1) Subject to section 9, the application of this Act extends to contracts of insurance and proposed contracts of insurance the proper law of which is or would be the law of a State or the law of a Territory in which this Act applies or to which this Act extends. (2) For the purposes of subsection (1), where the proper law of a contract or proposed contract would, but for an express provision to the contrary included or to be included in the contract or in some other contract, be the law of a State or of a Territory in which this Act applies or to which this Act extends, then, notwithstanding that provision, the proper law of the contract is the law of that State or Territory.

9 Exceptions to application of Act

(1) Except as otherwise provided by this Act, this Act does not apply to or in relation to contracts and proposed contracts: (a) of reinsurance; or (b) of insurance entered into, or proposed to be entered into, by a private health insurer within the meaning of the Private Health Insurance Act 2007 in respect of its health insurance business within the meaning of Division 121 of that Act; or (ba) of insurance entered into, or proposed to be entered into, by a private health insurer within the meaning of the Private Health Insurance Act 2007 in respect of its health‑related business within the meaning of section 131‑15 of that Act that is conducted through a health benefits fund (as defined by section 131‑10 of that Act); or (c) of insurance entered into, or proposed to be entered into, by a friendly society; or (ca) of insurance entered into, or proposed to be entered into, by the Export Finance and Insurance Corporation, other than short‑term insurance contracts within the meaning of the Export Finance and Insurance Corporation Act 1991 that are entered into on or after the commencement of this paragraph; or (d) to or in relation to which the Marine Insurance Act 1909 applies; or (e) entered into or proposed to be entered into for the purposes of a law (including a law of a State or Territory) that relates to: (i) workers’ compensation; or (ii) compensation for the death of a person, or for injury to a person, arising out of the use of a motor vehicle; or (f) entered into or proposed to be entered into: (i) for the purposes of a law (including a law of a State or a Territory) that relates to workers’ compensation; and (ii) to provide insurance cover in respect of an employer’s liability under a rule of the common law that requires payment of damages to a person for employment‑related personal injury. (1A) If a contract of insurance, or a proposed contract of insurance, includes: (a) provisions (the first group of provisions) that would, if they comprised a single contract or proposed contract, form a contract referred to in any of paragraphs (1)(a) to (f); and (b) provisions (the second group of provisions) that would, if they comprised a single contract or proposed contract, form a contract other than a contract referred to in any of paragraphs (1)(a) to (f); then subsection (1) applies as if the first group of provisions and the second group of provisions were each a separate contract or proposed contract. (1B) Despite subsection (1A), if a contract of insurance, or a proposed contract of insurance, includes: (a) provisions (the first group of provisions) for the purposes of a law referred to in subparagraph (1)(f)(i); and (b) provisions (the second group of provisions) that provide insurance cover of the kind referred to in subparagraph (1)(f)(ii); then subsection (1) applies as if the first group of provisions and the second group of provisions were together a separate contract or proposed contract. (1C) If: (a) a provision (a related provision) of a contract of insurance, or a proposed contract of insurance, relates to or affects the operation of a group or groups of provisions included in the contract or proposed contract; and (b) because of subsection (1A) or (1B), subsection (1) applies as if that group or those groups of provisions were a separate contract or proposed contract; then the related provision is, for the purposes of subsection (1), to be regarded as a provision included in that separate contract or proposed contract. (2) This Act does not apply to or in relation to contracts and proposed contracts of insurance entered into, or proposed to be entered into, in the course of State insurance or Northern Territory insurance, including contracts and proposed contracts entered into, or proposed to be entered into, by: (a) a State or the Northern Territory; and (b) some other insurer; as joint insurers. (3) Sections 37, 41, 58, 59, 60, 63, 69 and 74 do not apply in relation to contracts, and proposed contracts, of insurance against the risk of the loss of an aircraft, or damage to the hull of an aircraft, as a result of war. (4) Sections 53 and 63 do not apply in relation to a provision of a contract, or a proposed contract, of insurance to the extent that: (a) the provision authorises or permits the insurer to vary or cancel either or both of the following: (i) cover for risks related to war; (ii) cover for risks related to terrorism; and (b) the provision is prescribed or otherwise identified by the regulations.

9A Exclusion of pleasure craft from the Marine Insurance Act 1909

(1) The Marine Insurance Act 1909 does not apply to a contract of marine insurance made in respect of a pleasure craft unless the contract is made in connection with the pleasure craft’s capacity as cargo. (2) For the purposes of this section, a pleasure craft is a ship that is: (a) used or intended to be used: (i) wholly for recreational activities, sporting activities, or both; and (ii) otherwise than for reward; and (b) legally and beneficially owned by one or more individuals; and (c) not declared by the regulations to be exempt from this subsection. (3) For the purposes of paragraph (2)(a), any minor, infrequent and irregular use of a ship for activities other than: (a) recreational activities; or (b) sporting activities; is to be ignored. (4) In this section:

contract of marine insurance has the same meaning as in the Marine Insurance Act 1909.

10 Contracts of insurance

(1) A reference in this Act to a contract of insurance includes a reference to a contract that would ordinarily be regarded as a contract of insurance although some of its provisions are not by way of insurance. (2) A reference in this Act to a contract of insurance includes a reference to a contract that includes provisions of insurance in so far as those provisions are concerned, although the contract would not ordinarily be regarded as a contract of insurance. (3) Where a provision included in a contract that would not ordinarily be regarded as a contract of insurance affects the operation of a contract of insurance to which this Act applies, that provision shall, for the purposes of this Act, be regarded as a provision included in the contract of insurance.

11 Interpretation

(1) In this Act, unless the contrary intention appears:

annual turnover, of a body corporate during a 12‑month period, means the sum of the values of all the supplies that the body corporate, and any body corporate related to the body corporate, have made, or are likely to make, during the 12‑month period, other than:

(a) supplies made from any of those bodies corporate to any other of those bodies corporate; or
(b) supplies that are input taxed; or
(c) supplies that are not for consideration (and are not taxable supplies under section 72‑5 of the A New Tax System (Goods and Services Tax) Act 1999); or
(d) supplies that are not made in connection with an enterprise that the body corporate carries on; or
(e) supplies that are not connected with Australia.

Expressions used in this definition that are also used in the A New Tax System (Goods and Services Tax) Act 1999 have the same meaning as in that Act.

ASIC means the Australian Securities and Investments Commission.

avoid, in relation to a contract of insurance, means avoid from its inception.

benefit derived and detriment avoided because of an offence has the meaning given by section 75F.

binder means an authority given by an insurer to an insurance intermediary to enter into, as agent for the insurer, contracts of insurance on behalf of the insurer as insurer.

broker’s placing slip means a document that:

(a) is evidence of a contract of insurance; and
(b) bears a notation by an insurer setting out the extent of the insurance cover that the insurer agrees to provide under the contract.

business day means a day that is not a Saturday, a Sunday or a public holiday or bank holiday.

civil penalty provision: a subsection of this Act (or a section of this Act that is not divided into subsections) is a civil penalty provision if:

(a) the words “civil penalty” and one or more amounts in penalty units are set out at the foot of the subsection (or section); or
(b) another provision of this Act specifies that the subsection (or section) is a civil penalty provision.

consumer credit insurance means insurance provided by a class of contracts of insurance:

(a) that is declared by the regulations to be a class of contracts to which Division 1 of Part V of this Act applies; and
(b) that is identified by those regulations as consumer credit insurance.

consumer insurance contract has the meaning given by section 11AB.

continuous disability insurance policy means a contract that is a continuous disability policy within the meaning of the Life Insurance Act 1995.

contract of life insurance means a contract that constitutes a life policy within the meaning of the Life Insurance Act 1995.

contravention:

(a) in relation to an offence against a law—includes an ancillary offence relating to the offence against the law; and
(b) in relation to a civil penalty provision—has a meaning affected by section 75Q.

duty of disclosure means the duty referred to in section 21.

duty of the utmost good faith means the duty referred to in subsection 13(1).

duty to take reasonable care not to make a misrepresentation means the duty referred to in section 20B.

engage in conduct means:

(a) do an act; or
(b) omit to perform an act.

friendly society means:

(a) a body that is a friendly society for the purposes of the Life Insurance Act 1995; or
(b) a body that is registered or incorporated as a friendly society under a law of a State or Territory; or
(c) a body that is permitted, by a law of a State or Territory, to assume or use the expression friendly society; or
(d) a body that, immediately before the date that is the transfer date for the purposes of the Financial Sector Reform (Amendments and Transitional Provisions) Act (No. 1) 1999, was registered or incorporated as a friendly society under a law of a State or Territory.

group life contract means a contract of life insurance that is maintained for the purposes of:

(a) a superannuation or retirement scheme under which there can be more than one life insured; or
(b) another kind of group life scheme (including a scheme that is not related to employment) under which there can be more than one life insured.

guardian, in relation to a person who has not attained the age of 18 years, means a person who acts in the place of a parent of the person but does not include a person who so acts only for limited or particular purposes or periods.

holder has the same meaning as in the Retirement Savings Accounts Act 1997.

infringement notice means a notice given under section 75W.

insurance broker means a person who carries on the business of arranging contracts of insurance, whether in Australia or elsewhere, as agent for intending insureds.

insurance intermediary means a person who:

(a) for reward; and
(b) as an agent for one or more insurers or as an agent for intending insureds;

arranges contracts of insurance in Australia or elsewhere, and includes an insurance broker.

insured and insurer include a proposed insured and a proposed insurer, respectively.

involved, in relation to a contravention, has the same meaning as in the Corporations Act 2001.

life insured includes a proposed life insured.

payment period, in relation to an infringement notice, has the meaning given by section 75Z.

pecuniary penalty order has the meaning given by subsection 75B(4).

policy document, in relation to a contract of insurance, means:

(a) a document prepared by the insurer as evidence of the contract; or
(b) a broker’s placing slip that constitutes evidence of the contract;

and includes, in relation to an interim contract of insurance, a document of the kind usually known as a cover note prepared by the insurer or by an insurance intermediary with the authority of the insurer.

proposal form includes:

(a) a document containing questions to which a person is asked to give answers (whether in the document or not), where the answers are intended (whether by the person who answered them, by the insurer or by some other person) to be used in connection with a proposed contract of insurance; and
(b) a form relating to the proposed membership of a person of a superannuation, retirement or other group life scheme.

relevant court means:

(a) the Federal Court of Australia; or
(b) the Federal Circuit and Family Court of Australia (Division 2); or
(c) the Supreme Court of a State or Territory.

relevant failure, in relation to a contract of insurance, has the meaning given by section 27AA.

RSA has the same meaning as in the Retirement Savings Accounts Act 1997.

RSA provider has the same meaning as in the Retirement Savings Accounts Act 1997.

subject to an infringement notice, in relation to an offence provision or civil penalty provision, has the meaning given by section 75X.

third party beneficiary, under a contract of insurance, means a person who is not a party to the contract but is specified or referred to in the contract, whether by name or otherwise, as a person to whom the benefit of the insurance cover provided by the contract extends.

this Act includes the regulations.

writing means writing in the English language or in another language agreed between the insurer and the insured.

(2) For the purposes of this Act, an interim contract of insurance is a contract of insurance that is intended by the insurer: (a) to provide temporary insurance cover; and (b) to be replaced or superseded by another contract of insurance; whether or not the contract is evidenced by a document of the kind usually known as a cover note. (4) For the purposes of this Act: (a) a superannuation contract is a contract of life insurance that is being maintained for the purposes of a superannuation or retirement scheme, where the insured is a trustee for the purposes of the scheme; and (b) an individual superannuation contract is a superannuation contract as referred to in paragraph (a) under which there can be one life insured only. (6) For the purposes of this Act, a contract of general insurance is a contract of insurance that is not a contract of life insurance. (7) For the purposes of this Act, a contract of liability insurance is a contract of general insurance that provides insurance cover in respect of the insured’s liability for loss or damage caused to a person who is not the insured. (8) For the purposes of this Act, an instalment contract of general insurance is a contract of general insurance the premium for which is, by virtue of a provision of the contract, payable by 7 or more instalments in a year. (9) Subject to subsection (10), a reference in this Act to the entering into of a contract of insurance includes a reference to: (a) in the case of a contract of life insurance—the making of an agreement by the parties to the contract to extend or vary the contract; (b) in the case of any other contract of insurance—the making of an agreement by the parties to the contract to renew, extend or vary the contract; or (c) the reinstatement of any previous contract of insurance. (10) Notwithstanding subsection (9): (a) subject to paragraph (c), where, after the commencement of this Act and at or before the original entering into, or the renewal, extension or reinstatement, of a contract of insurance, the insurer has given information to the insured as required by section 22, 35, 37, 37C, 40, 44, 49 or 68, the requirement by that section to give information to the insured shall be deemed to be satisfied at or before any subsequent renewal, extension or reinstatement of the contract; (b) sections 22 and 40 do not require an insurer to give information to the insured at or before a variation of the relevant contract of insurance, unless subsection (10A) applies to the variation; and (c) sections 35, 37, 37C, 44, 49 and 68 require an insurer to give information to the insured at or before a variation of the relevant contract of insurance, but only to the extent that the information relates to the provision or provisions varied or proposed to be varied. (10A) This subsection applies to a variation of a contract of insurance if: (a) the variation: (i) is involved in a renewal, extension or reinstatement of the contract; or (ii) will provide a kind of insurance cover that was not provided by the contract immediately before the variation; or (iii) in the case of a contract of life insurance—will increase a sum insured under the contract in respect of one or more of the life insureds; and (b) the variation is not an automatic variation but is required to be expressly agreed between the insurer and the insured before the contract is varied. (11) Where a provision of this Act requires anything to be done before a particular contract is entered into, it is sufficient compliance with that provision if that thing is done at the time when the contract is entered into.

11AA Application of the Criminal Code

Chapter 2 of the Criminal Code applies to all offences against this Act.

Note: Chapter 2 of the Criminal Code sets out the general principles of criminal responsibility.

11AB Consumer insurance contracts

(1) For the purposes of this Act, a contract of insurance is a consumer insurance contract if the insurance is obtained wholly or predominantly for the personal, domestic or household purposes of the insured. (2) A contract of insurance is also a consumer insurance contract if: (a) it is for new business; and (b) the insurer, before the contract is entered into, gives the insured a written notice stating that the contract is a consumer insurance contract. (3) If it is alleged in a proceeding in relation to a contract of insurance that the contract is a consumer insurance contract, it is presumed that the contract is a consumer insurance contract unless the contrary is established.

Part IA—Administration

11AAA Definition

In this Part, unless the contrary intention appears:

relevant legislation means:

(a) this Act; or
(b) Part 3 of the Medical Indemnity (Prudential Supervision and Product Standards) Act 2003.

11A ASIC responsible for general administration of Act

Subject to any directions of the Minister, ASIC has the general administration of this Act.

11B Powers of the ASIC

For the purpose of undertaking the general administration of the relevant legislation, ASIC has power to do all things that are necessary or convenient to be done in connection with the administration of the relevant legislation and, without limiting the generality of that power, has power: (a) to promote the development of facilities for handling inquiries in relation to insurance matters; and (b) to monitor complaints in relation to insurance matters; and (c) to liaise generally with other persons or bodies having a responsibility to deal with inquiries, complaints and disputes concerning insurance matters; and (d) to review documents (including documents promoting particular kinds of insurance cover) issued by insurers and given to ASIC in compliance with section 11C; and (e) to review particulars, statistics and documents given to ASIC in compliance with section 11D; and (f) to monitor legal judgments, industry trends and the development of community expectations that are, or are likely to be, of relevance to the efficient operation of the relevant legislation; and (g) to promote the education of the insurance industry, the legal profession and consumers as to the objectives and requirements of the relevant legislation.

11C Supervisory powers—ASIC may obtain insurance documents

(1) ASIC may, for any purpose connected with the general administration of the relevant legislation, by notice in writing given to an insurer, require the insurer to give to ASIC, within 30 days of receipt of the notice, or such longer period as is specified in the notice, copies of: (a) documents specified in the notice relating to insurance cover provided, or proposed to be provided, by the insurer; or (b) documents relating to insurance cover of a kind specified in the notice provided, or proposed to be provided, by the insurer. (2) An insurer must not fail, without reasonable excuse, to comply with the requirements of a notice under subsection (1).

Penalty: 150 penalty units.

Note: For the liability of a director, employee or agent of an insurer, see section 11DA.

(2A) An offence against subsection (2) is a strict liability offence.

Note: For strict liability, see section 6.1 of the Criminal Code.

(3) Subsection (1) does not require an insurer to give to ASIC any document dealing with the insurance cover provided to a particular person unless: (a) that person, or another person having an entitlement to claim under that insurance cover, has given a written authorisation to ASIC permitting ASIC to require the giving of that document; and (b) ASIC has given a copy of the authorisation to the insurer with the notice.

Note: A defendant bears an evidential burden in relation to the matters in subsection (3), see subsection 13.3(3) of the Criminal Code.

(4) It is a reasonable excuse for an insurer to refuse or fail to comply with the requirements of a notice under subsection (1) if to do so would tend to incriminate the insurer.

Note: A defendant bears an evidential burden in relation to the matters in subsection (4) (see subsection 13.3(3) of the Criminal Code.

11D Supervisory powers—ASIC may review administrative arrangements etc.

(1) ASIC may, for any purpose connected with the general administration of the relevant legislation, by notice in writing given to an insurer, require the insurer to give to ASIC, within 30 days of receipt of the notice or such longer period as is specified in the notice: (a) written particulars of the organisational structure and administrative arrangements of the insurer either generally or in a particular area of insurance; or (b) statistics relating to the nature and volume of the insurance business of the insurer either generally or in a particular area of insurance; or (c) copies of any training guides, work manuals or other materials of a similar nature used by an insurer in instructing its employees or any insurance intermediaries dealing with persons who have, or may be likely to seek, insurance cover from the insurer. (2) An insurer must not, intentionally or recklessly, give ASIC, in purported compliance with a requirement under subsection (1), particulars or statistics that are false or misleading in a material particular.

Penalty: 150 penalty units.

Note: For the liability of a director, employee or agent of an insurer, see section 11DA.

(3) An insurer must not fail, without reasonable excuse, to comply with the requirements of a notice under subsection (1).

Penalty: 150 penalty units.

Note: For the liability of a director, employee or agent of an insurer, see section 11DA.

(3A) An offence against subsection (3) is a strict liability offence.

Note: For strict liability, see section 6.1 of the Criminal Code.

(4) Subsection (1) does not require an insurer to give ASIC a copy of any document or any information: (a) that reveals the identity of a particular insured or third party claimant; or (b) from which the identity of a particular insured or third party claimant can be deduced.

Note: A defendant bears an evidential burden in relation to the matters in subsection (4), see subsection 13.3(3) of the Criminal Code.

(5) It is a reasonable excuse for an insurer to refuse or fail to comply with the requirements of a notice under subsection (1) if to do so would tend to incriminate the insurer.

Note: A defendant bears an evidential burden in relation to the matters in subsection (5), see subsection 13.3(3) of the Criminal Code.

(6) In this section:

third party claimant means a person, other than the insured, who is, or might be, entitled to make a claim under a contract of insurance.

11DA Supervisory powers—liability of directors, employees and agents of insurers

(1) A person commits an offence if: (a) the person is: (i) a director of a company that is an insurer; or (ii) an employee or agent of an insurer; and (b) the person permits or authorises the insurer to engage in conduct; and (c) the conduct constitutes an offence (the insurer offence) against subsection 11C(2) or 11D(2) or (3); and (d) the insurer commits the insurer offence.

Penalty: 150 penalty units.

(2) There is no fault element for the physical element described in paragraph (1)(d) other than the fault elements (if any) for the physical elements of the insurer offence. (3) To avoid doubt: (a) an insurer does not commit the insurer offence, for the purposes of subsection (1), if the insurer has a defence to the insurer offence; and (b) a person may be convicted of an offence against subsection (1) even if the insurer concerned has not been prosecuted for, or convicted of, the insurer offence. (4) In this section:

conduct means:

(a) an act; or
(b) an omission to perform an act.

engage in conduct means:

(a) do an act; or
(b) omit to perform an act.

11E Examination of documents by ASIC not to imply compliance with relevant legislation

The fact that documents in use by an insurer previously have been given to ASIC under section 11C or 11D does not imply: (a) that ASIC has found that the documents comply with the requirements of the relevant legislation; or (b) that ASIC endorses any practice or procedure described in the documents.

11F ASIC’s power to intervene in proceedings

(1) ASIC may intervene in any proceeding relating to a matter arising under: (a) this Act; or (b) Part 3 of the Medical Indemnity (Prudential Supervision and Product Standards) Act 2003. (2) If ASIC intervenes in a proceeding under subsection (1): (a) ASIC is taken to be a party to the proceeding; and (b) ASIC has all the rights, duties and liabilities of such a party (subject to this Act or Part 3 of the Medical Indemnity (Prudential Supervision and Product Standards) Act 2003, as the case requires). (3) Without limiting subsection (2), ASIC may appear and be represented in a proceeding in which it intervenes under subsection (1): (a) by a staff member of ASIC; or (b) by a natural person or body to whom ASIC has delegated its functions and powers under this Act; or (c) by a solicitor or by counsel.

Part II—The duty of the utmost good faith

12 This Part not to be read down

The effect of this Part is not limited or restricted in any way by any other law, including the subsequent provisions of this Act, but this Part does not have the effect of imposing on an insured, in relation to the disclosure of a matter to the insurer, a duty other than: (a) in relation to a consumer insurance contract or proposed consumer insurance contract—the duty to take reasonable care not to make a misrepresentation; or (b) in relation to any other contract of insurance or proposed contract of insurance—the duty of disclosure.

Note: This Part operates in addition to the unfair contract terms provisions of the Australian Securities and Investments Commission Act 2001 (see paragraph 15(2)(d) of this Act).

13 The duty of the utmost good faith

(1) A contract of insurance is a contract based on the utmost good faith and there is implied in such a contract a provision requiring each party to it to act towards the other party, in respect of any matter arising under or in relation to it, with the utmost good faith. (2) A failure by a party to a contract of insurance to comply with the provision implied in the contract by subsection (1) is a breach of the requirements of this Act. (2A) An insurer under a contract of insurance contravenes this subsection if the insurer fails to comply with the provision implied in the contract by subsection (1).

Civil penalty: 5,000 penalty units.

(3) A reference in this section to a party to a contract of insurance includes a reference to a third party beneficiary under the contract. (4) This section applies in relation to a third party beneficiary under a contract of insurance only after the contract is entered into.

14 Parties not to rely on provisions except in the utmost good faith

(1) If reliance by a party to a contract of insurance on a provision of the contract would be to fail to act with the utmost good faith, the party may not rely on the provision. (2) Subsection (1) does not limit the operation of section 13. (3) In deciding whether reliance by an insurer on a provision of the contract of insurance would be to fail to act with the utmost good faith, the court shall have regard to any notification of the provision that was given to the insured, whether a notification of a kind mentioned in section 37 or otherwise.

14A Powers of ASIC—insurer’s failure to comply with the duty of the utmost good faith in relation to handling or settlement of claims

(1) This section applies if an insurer under a contract of insurance has failed to comply with the duty of the utmost good faith in the handling or settlement of a claim or potential claim under the contract. (2) Despite any provision of Chapter 7 of the Corporations Act 2001 or any regulation made under that Chapter, ASIC may exercise its powers under Subdivision C of Division 4 of Part 7.6 of that Act or Subdivision A of Division 8 of that Part in relation to the insurer as if the insurer’s failure to comply with the duty of the utmost good faith were a failure by the insurer to comply with a financial services law (within the meaning of the Corporations Act 2001).

Note: Subdivision C of Division 4 of Part 7.6 of the Corporations Act 2001 deals with variation, suspension and cancellation of an Australian financial services licence, and Subdivision A of Division 8 of that Part deals with banning persons from providing financial services.

15 Certain other laws not to apply

(1) A contract of insurance is not capable of being made the subject of relief under: (a) any other Act; or (b) a State Act; or (c) an Act or Ordinance of a Territory. (2) Relief to which subsection (1) applies means relief in the form of: (a) the judicial review of a contract on the ground that it is harsh, oppressive, unconscionable, unjust, unfair or inequitable; or (b) relief for insureds from the consequences in law of making a misrepresentation; but does not include: (c) relief in the form of compensatory damages; or (d) relief relating to the effect of section 12BF (unfair contract terms) of the Australian Securities and Investments Commission Act 2001.

Note: See Subdivision G (enforcement and remedies) of Division 2 of Part 2 of the Australian Securities and Investments Commission Act 2001 for certain remedies relating to the effect of section 12BF of that Act.