14Cancellation of third-party policies

14 Cancellation of third-party policies

14 Cancellation of third-party policies

(cf s 13 MAA)

(1) A licensed insurer has no power to cancel a third-party policy.

(2) A third-party policy may only be cancelled in accordance with this section.

(3) A third-party policy is cancelled on the cancellation of the registration of the motor vehicle to which it relates, except where the registration is cancelled under Division 3 of Part 4 of the Fines Act 1996.

(4) If the whole or any part of the premium payable in respect of a third-party policy is paid by cheque or credit card, and the cheque is not met on due presentation or the credit card transaction is not duly honoured or is fraudulent, the licensed insurer may request TfNSW to suspend the registration of the motor vehicle to which the policy relates for a period of 14 days.

(4A) If the insured person under a third-party policy deliberately avoided paying the correct premium for the third-party policy by making a statement in connection with the issue of the policy that the insured person knew was false, the licensed insurer may request TfNSW to suspend the registration of the motor vehicle to which the policy relates for a period of 14 days.

(4B) A licensed insurer is not to request TfNSW to suspend the registration of a motor vehicle except with the prior approval in writing of the Authority and is not to make such a request unless the amount outstanding remains unpaid.

(5) Before requesting TfNSW to suspend the registration of a motor vehicle, the licensed insurer must notify the owner of the motor vehicle that the insurer intends to request TfNSW to suspend the registration and that the registration and third-party policy may be cancelled at the expiration of the suspension period if the amount outstanding has not been paid before the expiration of the period.

(6) TfNSW must comply with a request by a licensed insurer under this section to suspend the registration of a motor vehicle.

(6A) If the amount outstanding remains unpaid, the licensed insurer may request TfNSW before the end of the suspension period to cancel the registration of the motor vehicle at the expiration of the suspension period. A licensed insurer is not to request TfNSW to cancel the registration of a motor vehicle except with the prior approval in writing of the Authority.