The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry made a number of recommendations regarding the rights and obligations of consumers purchasing insurance policies.
365体育投注官网On 4 February 2019, the Government released its response to the Royal Commission, and is taking action on all 76 recommendations.
365体育投注官网The Government is today releasing exposure draft legislation for public comment which implements recommendation 4.5 of the Royal Commission.
365体育投注官网Recommendation 4.5 implements a duty to take reasonable care not to make a misrepresentation to an insurer for consumer insurance contracts. The changes ensure that obligations for disclosure applied to consumers do not enable insurers to unduly reject the payment of legitimate claims.
This duty will replace the existing duty of disclosure contained in Part IV of the Insurance Contracts Act 1984365体育投注官网. The duty of disclosure is important to ensure that insurers are able to appropriately price the risks being underwritten through limiting the risk of fraud and misleading disclosures. However, the current requirements fall short of adequately safeguarding consumers against having their claims declined where they may have inadvertently failed to disclose their past circumstances or because insurers have failed to ask the right questions.