ARTICLE · 03 APRIL 2024

Regulatory Rumbles: Interaction Between UCT & The Insurance Contracts Act – The "Flotation Devices"

Herbert Smith Freehills Kramer LLP

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The recent case of ASIC v Auto & General Insurance Company Limited [2024] FCA 272 raises an extremely important issue (and resolution) for all insurers in relation...

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Michael Vrisakis

Shan-Verne Liew

Madeline Muddle

The Lead Up

The recent case of ASIC v Auto & General Insurance Company Limited [2024] FCA 272 raises an extremely important issue (and resolution) for all insurers in relation to contracts of insurance issued by them.

The factual centrepoint of the case was the inclusion, in the relevant product disclosure statement, of a term which required an insured person to "tell us if anything changes while you're insured with us". The insurer could refuse to pay a claim, reduce the amount paid, cancel the contract or not offer to renew the contract if the insured did not comply with this obligation. ASIC's contention was that the inclusion of this provision infringed the unfair contract terms regime in the ASIC Act. However, the Court found in favour of the insurer, finding that the term was not unfair.

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