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ARTICLE · 02 MARCH 2020

What can insurers learn from the UK experience with unfair terms?

Colin Biggers & Paisley
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The unfair contract terms (UCT) regime will extend to Australian insurance contracts and come into effect in April 2021.

AustraliaInsurance
Toby Blyth
Toby Blyth
Michael Bracken
Michael Bracken
Hamish Ratten
Hamish Ratten

In brief - Unfair contract terms regime to extend to insurance contracts and come into effect in April 2021

Recommendation 4.7 of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry suggested the application of the unfair contract terms (UCT) regime to insurance contracts. The Australian Government in 2017 announced an intention to apply the regime to insurance contracts, and in 2018 Treasury published a proposals paper for a model to do this.

The recommendation and Government proposals have now been realised.

The law will be amended to extend the UCT regime under the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act) to capture insurance policies covered by the Insurance Contracts Act 1984 (Cth) (ICA).

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