On 29 July 2010 Robert Samut, Partner and Samantha Traves,
Consultant, conducted a full day seminar in Port Moresby PNG on the
introduction of a General Insurance Contracts Bill. The seminar,
arranged by the PNG Insurance Commissioner, saw 150 people from
insurance, legal and consumer groups attend what was a very
interactive discussion on the proposed legislation.
The proposed legislation is based upon Australia's
Insurance Contracts Act 1984 (Cth) including the pending
reforms to that Act. The purpose of the seminar (and an earlier
seminar conducted in July 2006) was to ensure that all stakeholders
were able to hear about and have their say on the draft laws. The
Insurance Commissioner has allowed until mid September 2010 for
submissions to be made, with a view to the legislation being
introduced in the first half of 2011.
PNG is experiencing a resources boom which has the potential to
provide this country of 6 million people with a standard of living
far beyond what they have today. There has recently been an
announcement by ExxonMobil confirming its $18billion investment in
liquefied natural gas (LNG) with more gas projects
looking increasingly likely. Add to this existing production in
major gold, nickel and copper projects and a visionary plan to pipe
water from PNG to Queensland (feasibility studies currently being
undertaken) and you have a small country on the verge of big
The PNG economy is the fastest growing in our region. Its real
GDP growth rate compares with China. The government recognises that
to provide both foreign investors and the local business with the
certainty they require, new legislation is required, particularly
in the financial services sector. The PNG Insurance Commissioner is
determined to provide a market where insurers can transact business
freely with consumers who have confidence in the policies which
they are acquiring. The proposed General Insurance Contracts Bill
discussed in Port Moresby on 29 July provides the framework for
this objective to be achieved. When industry submissions are
received, the draft legislation will be finalised. At the end of
the day Papua New Guinea will have one of the most effective pieces
of insurance contracts legislation anywhere in the world.
Coincidentally the PNG seminar took place at a time when the UK
is also starting to seriously look at the reform of its insurance
contracts laws. On 15 December 2009, the Consumer Insurance
(Disclosure and Representations) Bill (UK) was published by
the Law Commission and the Scottish Law Commission. On 19 July this
year, the same Law Commission published two issues papers dealing
with the further reform of UK insurance contracts laws (the most
significant being a paper dealing with the post contract duty of
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Contractors and principals should ensure they have appropriate insurance coverage instead of relying on indemnity clauses.
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