The Insurance Contracts Amendment Bill (the Bill) re-introduces the measures contained in the Insurance Contracts Amendment Bill 2010 (the 2010 Bill) along with some minor refinements.
“The measures in this Bill continue the Government’s efforts to reduce the burden of regulation on business and consumers,” Mr Shorten said.
The key measures in the Bill include:
- removing impediments to the use of electronic communication for statutory notices and documents;
- giving powers to the regulator, Australian Securities and Investments Commission, to take action to address breaches of the duty of utmost good faith by insurers, including in respect of claims handling; and
- making the duty of disclosure easier for consumers to understand and comply with, especially at renewal of household/domestic insurance contracts.
“The ability for statutory notices and documents to be provided electronically will not only bring the insurance industry into line with other industries but reduce complexity for consumers,” Mr Shorten said.
“These measures build on the Government’s significant reforms to insurance, such as a standard definition of flood and a one page key facts sheet for all home and contents policies to help Australian consumers understand what they are covered for.”
“The Government has also launched the National Flood Risk Information Portal, a new online one-stop-shop for flood risk information to assist the community, planners and insurers to access important flood information about their local area, as well as encouraged a range of changes to the General Insurance Code of Practice directed at enhancing protections for consumers including for those making claims following natural disasters.”
“The measures in this Bill will facilitate even more effective communication between insurers and consumers,” Mr Shorten said.
The minor refinements have been made to overcome issues identified in respect to the:
- timing of the application of the duty of disclosure measures;
- structure of the measures relating to remedies available to life insurers in respect to both traditional and non-traditional life insurance contracts; and
- factors to which the court should give consideration in respect to the duty of disclosure.
The Government is seeking comments on all the measures contained in the Bill. The exposure draft legislation and accompanying explanatory material can be found here www.treasury.gov.au/ConsultationsandReviews.
The deadline for submissions is 12 December 2012.
Mr Shorten’s Media Contact: Sam Casey 0421 697 660