The result of another Royal Commission recommendation, as of 5
October 2021, insurance sold to retail will no longer benefit from
the protection of the duty of disclosure.
Instead, it will be replaced with a lesser duty – a
duty to take reasonable care not to make a
misrepresentation to an insurer. The full bill can be
found here.
What does this mean?
- It will be more difficult for an insurer to
demonstrate that an insurer failed to take reasonable
care, than it was to prove a breach of the duty of disclosure.
- In effect, it shifts the obligation to consider what an
insurer would need to know away from the consumer and
toward the insurer.
- It will give the consumer a defence for failing to
disclose certain facts, especially if they
weren't asked.
