It suggests that a standalone set of unfair contract terms protections be introduced in the Insurance Contracts (IC) Act, which largely mirror those in the Australian Securities and Investments Commission (ASIC) Act.
“If a court is to have the ability to choose the most appropriate remedy for a term found to be unfair, it makes sense for the remedies to be found together in the IC Act,” the ICA submission says.
ICA has long opposed Treasury’s plans to have insurance contracts subjected to existing unfair contract terms laws.
The alternative model was made in a Treasury submission, which took into account strong political and public concern on the sector’s exemption from unfair contract terms legislation.
ICA says it is “willing to explore a solution” that works in the interests of all stakeholders.
“Such an outcome would allow consumers to challenge insurance contracts for unfairness while not undermining the commercial certainty necessary for the stable and sustainable long term performance of the general insurance industry,” the submission says.
ICA also submits that it is unnecessary to tailor the definition of unfairness as proposed by Treasury.
It prefers that the generic approach taken in the ASIC Act and Australian Consumer Law be applied.
Published by Insurance News