Insurance Contracts Amendment Regulation 2015 (No. 1)

Link to law: https://www.comlaw.gov.au/Details/F2015L00573

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Insurance Contracts Amendment Regulation 2015 (No. 1)
 
Select Legislative Instrument No. 50, 2015
I, General the Honourable Sir Peter Cosgrove AK MC (Ret’d), Governor‑General of the Commonwealth of Australia, acting with the advice of the Federal Executive Council, make the following regulation.
Dated 16 April 2015
Peter Cosgrove
Governor‑General
By His Excellency’s Command
Josh Frydenberg
Assistant Treasurer
  
  
Contents
1............ Name................................................................................................... 1
2............ Commencement................................................................................... 1
3............ Authority............................................................................................. 1
4............ Schedules............................................................................................ 1
Schedule 1—Amendments commencing day after registration                 2
Insurance Contracts Regulations 1985                                                                  2
Schedule 2—Amendments commencing 28 December 2015                       7
Insurance Contracts Regulations 1985                                                                  7
 
1  Name
                   This is the Insurance Contracts Amendment Regulation 2015 (No. 1).
2  Commencement
                   Each provision of this instrument specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 has effect according to its terms.
 
Commencement information

Column 1
Column 2

Provisions
Commencement

1.  Sections 1 to 4 and anything in this instrument not elsewhere covered by this table
The day after this instrument is registered.

2.  Schedule 1
The day after this instrument is registered.

3.  Schedule 2
28 December 2015.

3  Authority
                   This instrument is made under the Insurance Contracts Act 1984.
4  Schedules
                   Each instrument that is specified in a Schedule to this instrument is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this instrument has effect according to its terms.
Schedule 1—Amendments commencing day after registration
  
Insurance Contracts Regulations 1985
1  At the end of regulation 2B
Add:
             (3)  However, a contract of insurance mentioned in subregulation (2) is not an eligible contract of insurance if:
                     (a)  the insurer gave the insured a notice mentioned in paragraph (2)(c) before 28 December 2015; and
                     (b)  the contract is subsequently renewed before 28 December 2016; and
                     (c)  before that renewal, the insurer gives the insured a notice under section 22 of the Act; and
                     (d)  in that notice, the insurer clearly indicates that contract of insurance is no longer an eligible contract of insurance.
2  At the end of subregulation 3(1)
Add:
            ; and (d)  for the renewal of an eligible contract of insurance—the form set out in Part 4 of Schedule 1.
3  At the end of Part 4
Add:
42  Amendments made by the Insurance Contracts Amendment Regulation 2014 (No. 1)
             (1)  Despite the repeal and substitution of Schedules 1 and 2 by the Insurance Contracts Amendment Regulation 2014 (No. 1), either the repealed or substituted Parts 1, 2 and 3 of Schedule 1, and either the repealed or substituted Schedule 2, may be used for the purposes of regulation 3 in relation to a contract of insurance entered into before 28 December 2015.
             (2)  Paragraph 3(1)(d) and Part 4 of Schedule 1 apply only in relation to an eligible contract of insurance that is proposed to be renewed on or after 28 December 2015.
             (3)  This regulation is repealed on 28 December 2015.
4  Schedules 1 and 2
Repeal the Schedules, substitute:
Schedule 1—Writing to inform of duty of disclosure
Note:       See subregulation 3(1).
Part 1—Contracts of general insurance, other than eligible contracts
  
Your duty of disclosure
            Before you enter into an insurance contract, you have a duty to tell us anything that you know, or could reasonably be expected to know, may affect our decision to insure you and on what terms.
            You have this duty until we agree to insure you.
            You have the same duty before you renew, extend, vary or reinstate an insurance contract.
            You do not need to tell us anything that:
·                     reduces the risk we insure you for; or
·                     is common knowledge; or
·                     we know or should know as an insurer; or
·                     we waive your duty to tell us about.
If you do not tell us something
            If you do not tell us anything you are required to, we may cancel your contract or reduce the amount we will pay you if you make a claim, or both.
            If your failure to tell us is fraudulent, we may refuse to pay a claim and treat the contract as if it never existed.
Part 2—Contracts of life insurance
  
Your duty of disclosure
            Before you enter into a life insurance contract, you have a duty to tell us anything that you know, or could reasonably be expected to know, may affect our decision to insure you and on what terms.
            You have this duty until we agree to insure you.
            You have the same duty before you extend, vary or reinstate the contract.
            You do not need to tell us anything that:
·                     reduces the risk we insure you for; or
·                     is common knowledge; or
·                     we know or should know as an insurer; or
·                     we waive your duty to tell us about.
If you do not tell us something
            In exercising the following rights, we may consider whether different types of cover can constitute separate contracts of life insurance. If they do, we may apply the following rights separately to each type of cover.
            If you do not tell us anything you are required to, and we would not have insured you if you had told us, we may avoid the contract within 3 years of entering into it.
            If we choose not to avoid the contract, we may, at any time, reduce the amount you have been insured for. This would be worked out using a formula that takes into account the premium that would have been payable if you had told us everything you should have. However, if the contract has a surrender value, or provides cover on death, we may only exercise this right within 3 years of entering into the contract.
            If we choose not to avoid the contract or reduce the amount you have been insured for, we may, at any time vary the contract in a way that places us in the same position we would have been in if you had told us everything you should have. However, this right does not apply if the contract has a surrender value or provides cover on death.
            If your failure to tell us is fraudulent, we may refuse to pay a claim and treat the contract as if it never existed.
Part 3—Eligible contracts of insurance
  
Your duty of disclosure
            Before you enter into an insurance contract, you have a duty of disclosure under the Insurance Contracts Act 1984.
            If we ask you questions that are relevant to our decision to insure you and on what terms, you must tell us anything that you know and that a reasonable person in the circumstances would include in answering the questions.
            You have this duty until we agree to insure you.
If you do not tell us something
            If you do not tell us anything you are required to tell us, we may cancel your contract or reduce the amount we will pay you if you make a claim, or both.
            If your failure to tell us is fraudulent, we may refuse to pay a claim and treat the contract as if it never existed.
Part 4—Renewal of eligible contracts of insurance
  
Your duty of disclosure
            Before you renew this contract of insurance, you have a duty of disclosure under the Insurance Contracts Act 1984.
            If we ask you questions that are relevant to our decision to insure you and on what terms, you must tell us anything that you know and that a reasonable person in the circumstances would include in answering the questions.
            Also, we may give you a copy of anything you have previously told us and ask you to tell us if it has changed. If we do this, you must tell us about any change or tell us that there is no change.
            If you do not tell us about a change to something you have previously told us, you will be taken to have told us that there is no change.
            You have this duty until we agree to renew the contract.
If you do not tell us something
            If you do not tell us anything you are required to tell us, we may cancel your contract or reduce the amount we will pay you if you make a claim, or both.
            If your failure to tell us is fraudulent, we may refuse to pay a claim and treat the contract as if it never existed.
Schedule 2—Words to inform of duty of disclosure for eligible contracts of insurance
Note:       See subregulation 3(2).
  
  
            Before you enter into an eligible contract of insurance with us, you have a duty of disclosure under the Insurance Contracts Act 1984.
            We may ask you questions that are relevant to our decision to insure you and on what terms. If we do, you must tell us anything that you know and that a reasonable person in the circumstances would include in their answer.
            You have this duty until we agree to insure you.
            If you do not tell us anything you are required to, we may cancel your contract or reduce the amount we will pay you if you make a claim, or both.
            If your failure to tell us is fraudulent, we may refuse to pay a claim and treat the contract as if it never existed.
Schedule 2—Amendments commencing 28 December 2015
  
Insurance Contracts Regulations 1985
1  Regulation 2B (heading)
Repeal the heading, substitute:
2B  Eligible contracts of insurance (Act, s21A(6))
2  Regulation 3
Repeal the regulation, substitute:
3  Duty of disclosure—written notice
             (1)  This regulation is made for paragraph 22(4)(a) of the Act.
             (2)  The form of writing that may be used to inform an insured of the matters mentioned in subsection 22(1) of the Act is:
                     (a)  for a contract of general insurance other than an eligible contract or insurance—the form set out in Part 1 of Schedule 1; and
                     (b)  for a contract of life insurance—the form set out in Part 2 of Schedule 1; and
                     (c)  for the original entering into of an eligible contract of insurance—the form set out in Part 3 of Schedule 1; and
                     (d)  for the renewal of an eligible contract of insurance—the form set out in Part 4 of Schedule 1.
             (3)  The form of writing that may be used to inform another person who may become a life insured of the matters mentioned in subsection 22(1) of the Act is set out in Schedule 1A (see subsection 22(2) of the Act).
3A  Duty of disclosure—reminder notice
             (1)  This regulation is made for paragraph 22(4)(b) of the Act.
             (2)  The form of writing that may be used to remind an insured of the matters mentioned in subsection 22(1) of the Act is:
                     (a)  for a contract of general insurance that is not an eligible contract of insurance—the form set out in Part 1 of Schedule 1B; and
                     (b)  for a contract of life insurance—the form set out in Part 2 of Schedule 1B; and
                     (c)  for an eligible contract of insurance—the form set out in Part 3 of Schedule 1B.
3B  Duty of disclosure—oral notice
             (1)  This regulation is made for subregulation 69(1A) of the Act.
             (2)  The words that may be used to inform an insured orally of the matters mentioned in subsection 22(1) of the Act for the original entering into of an eligible contract of insurance are set out in Schedule 2.
3  Schedule 1 (note to Schedule heading)
Repeal the note, substitute:
Note:       See subregulation 3(2).
4  Part 2 of Schedule 1
Repeal the Part, substitute:
Part 2—Contracts of life insurance
  
Your duty of disclosure
            Before you enter into a life insurance contract, you have a duty to tell us anything that you know, or could reasonably be expected to know, may affect our decision to insure you and on what terms.
            You have this duty until we agree to insure you.
            You have the same duty before you extend, vary or reinstate the contract.
            You do not need to tell us anything that:
·                     reduces the risk we insure you for; or
·                     is common knowledge; or
·                     we know or should know as an insurer; or
·                     we waive your duty to tell us about.
            If the insurance is for the life of another person and that person does not tell us everything he or she should have, this may be treated as a failure by you to tell us something that you must tell us.
If you do not tell us something
            In exercising the following rights, we may consider whether different types of cover can constitute separate contracts of life insurance. If they do, we may apply the following rights separately to each type of cover.
            If you do not tell us anything you are required to, and we would not have insured you if you had told us, we may avoid the contract within 3 years of entering into it.
            If we choose not to avoid the contract, we may, at any time, reduce the amount you have been insured for. This would be worked out using a formula that takes into account the premium that would have been payable if you had told us everything you should have. However, if the contract has a surrender value, or provides cover on death, we may only exercise this right within 3 years of entering into the contract.
            If we choose not to avoid the contract or reduce the amount you have been insured for, we may, at any time vary the contract in a way that places us in the same position we would have been in if you had told us everything you should have. However, this right does not apply if the contract has a surrender value or provides cover on death.
            If your failure to tell us is fraudulent, we may refuse to pay a claim and treat the contract as if it never existed.
5  After Schedule 1
Insert:
Schedule 1A—Writing to inform persons to be insured by others
Note:       See subregulation 3(3).
  
  
Insured’s duty of disclosure
            A person who enters into a life insurance contract in respect of your life has a duty, before entering into the contract, to tell us anything that he or she knows, or could reasonably be expected to know, may affect our decision to provide the insurance and on what terms.
            The person entering into the contract has this duty until we agree to provide the insurance.
            The person entering into the contract has the same duty before he or she extends, varies or reinstates the contract.
            The person entering into the contract does not need to tell us anything that:
·                     reduces the risk we insure you for; or
·                     is common knowledge; or
·                     we know or should know as an insurer; or
·                     we waive your duty to tell us about.
            If you do not tell us something that you know, or could reasonably be expected to know, may affect our decision to provide the insurance and on what terms, this may be treated as a failure by the person entering into the contract to tell us something that he or she must tell us.
If the person entering the contract does not tell us something
            In exercising the following rights, we may consider whether different types of cover can constitute separate contracts of life insurance. If they do, we may apply the following rights separately to each type of cover.
            If the person entering into the contract does not tell us anything he or she is required to, and we would not have provided the insurance if he or she had told us, we may avoid the contract within 3 years of entering into it.
            If we choose not to avoid the contract, we may, at any time, reduce the amount of insurance provided. This would be worked out using a formula that takes into account the premium that would have been payable if he or she had told us everything he or she should have. However, if the contract has a surrender value, or provides cover on death, we may only exercise this right within 3 years of entering into the contract.
            If we choose not to avoid the contract or reduce the amount of insurance provided, we may, at any time vary the contract in a way that places us in the same position we would have been in if he or she had told us everything he or she should have. However, this right does not apply if the contract has a surrender value or provides cover on death.
            If the failure to tell us is fraudulent, we may refuse to pay a claim and treat the contract as if it never existed.
Schedule 1B—Writing to remind of duty of disclosure
Note:       See regulation 3A.
Part 1—Contracts of general insurance
  
Reminder—your duty of disclosure
            You have previously been given a notice informing you of your duty of disclosure in relation to a general insurance contract.
            This is a duty to tell us about anything that you know, or could reasonably be expected to know, may affect our decision to insure you and on what terms.
            You have this duty until we agree to insure you.
Part 2—Contracts of life insurance
  
Reminder—your duty of disclosure
            You have previously been given a notice informing you of your duty of disclosure in relation to a life insurance contract.
            This is a duty to tell us about anything that you know, or could reasonably be expected to know, may affect our decision to insure you and on what terms.
            If the contract is for insurance of the life of another person, and that person does not tell us about anything that he or she knows, or could reasonably be expected to know, may affect our decision to provide the insurance and on what terms, this may be treated as a failure by you to tell us something that you must tell us.
            You have this duty until we agree to provide the insurance.
Part 3—Eligible contracts of insurance
  
Reminder—your duty of disclosure
            You have previously been given a notice informing you of your duty of disclosure in relation to an eligible contract of insurance.
            This is a duty to tell us, in response to our questions, anything that you know, and that a reasonable person in the circumstances would include in answering the questions.
            You have this duty until we agree to insure you.
6  Schedule 2 (note to Schedule heading)
Repeal the note, substitute:
Note:       See regulation 3B.