Australia: Advertising and distributing insurance products: navigating the regulation

Clayton Utz Insights
Last Updated: 22 July 2012
Article by David Gerber and Craig Hine

Key Points:

The challenge for issuers and distributors of insurance is making the right message clear while complying with relevant laws.

There is no shortage of regulation when it comes to advertising insurance products. It sometimes happens that there is a tension between the commercial position that a party is trying to achieve and the position allowed by regulations. Understanding where the boundaries lie is vital to avoid overstepping the mark with an advertising campaign which is intended to be as effective as possible within the confines of the law. But where do the boundaries lie?

ASIC's view can be gleaned, at least in part, from information it releases from time to time. For example, in February this year ASIC released Regulatory Guide 234 – Advertising financial products and advice services (RG 234) and, more recently, ASIC stated its views on certain types of advertising. Such guidance and statements provide helpful insights into ASIC's expectations when it comes to the advertising of financial products.

Unsurprisingly, many of ASIC's concerns relate to misleading and deceptive advertising. However, it is important to remember that there are other rules relevant to advertising and distributing insurance products.

Misleading and deceptive advertising

RG 234 is particularly helpful for determining when ASIC may consider that advertising will be misleading or deceptive for particular mediums. A focus of RG 234 is online advertising. For example, ASIC expresses a view that consumers should not need to go to another website or document to read disclaimers or warnings to correct a misleading impression created by an advertisement.

One key area of concern for ASIC is advertising which compares the price of insurance products which do not have sufficiently similar features and which does not clearly identify those differences. The commercial advantages of this type of advertising make it a popular choice for product issuers. However, if it is not done properly, there is a good chance ASIC will be paying close attention.

Comparative advertising

How alike must two products be for them to be substantially similar? And how clear must be any disclaimer pointing out the differences between products? The answer to these questions may vary depending on the medium used for the advertisement. Some products may be too dissimilar to compare using particular mediums or, in some cases, any medium.

What's most important is the overall impression created by an advertisement. Any comparison when considered in conjunction with an appropriately communicated disclaimer should be sufficiently clear so as to not create doubt or confusion in the mind of the consumer.

Another key area of concern for ASIC is advertising which falsely creates the impression that cover is available in particular circumstances or that such cover is not subject to any qualifications.

Advertising the scope of insurance cover

ASIC's recent media release (12-135MR) shows that ASIC is of the view that referring a consumer to a product disclosure statement (PDS) in an advertisement will not be sufficient to correct a misleading impression.

That media release refers to advertising by an insurer which included a table comparing the cover provided by that insurer against that provided by four of its competitors. By including a tick or a cross next to different types of cover, ASIC took the view that the advertisement gave the impression that the insurer provided unqualified cover for the items ticked. In fact, this was not the case. Some of the cover had limitations.

The advertisement referred consumers to the relevant PDS, which contained the conditions and exclusions limiting the cover. In this case ASIC's view was that this was not sufficient to correct the misleading impression. ASIC's message was that "qualifications should be given sufficient prominence to effectively convey the key information".

Avoiding misleading and deceptive advertising is only one of many considerations to which issuers and distributors of insurance products need to pay close attention.

Standard cover and distribution of insurance

It is important to remember that an insurer must give written notification if it derogates from standard cover. It must clearly inform a prospective insured in writing if an exclusion applies under a "prescribed contract"1 which is in addition to those allowed by the Insurance Contracts Regulations 1985 (Cth) or which prevents cover for a "prescribed event"2. The insurer must inform before entering into a contract. If it fails to do so, the insurer may become liable pursuant to section 35 of the Insurance Contracts Act 1984 (Cth) to pay an amount in respect of the excluded cover upon the happening of that event. This rule applies unless the insured knew or a reasonable person in the circumstances could be expected to have known that cover for the event was excluded.

Insurers should also take care in the use of different distribution channels for marketing insurance products. Some distribution channels may allow a customer to purchase a product before having an opportunity to view the relevant PDS or to be given a Financial Services Guide (


). In those situations it is necessary to ensure that all necessary disclosures are made by some other means. Such disclosures might include, for example, the time critical FSG-related disclosures required by section 941D of the Corporations Act 2001 (Cth) and information about relevant policy exclusions to avoid the operation of section 35 of the Insurance Contracts Act 1984 (Cth).

Advertisers of insurance product should also keep in mind the requirements to make specific disclosures in connection with the advertising of financial products pursuant to section 1018A of the Corporations Act 2001 (Cth).


By their very nature, insurance products can be complex. Those advertising them need to take care to ensure that potential customers are receiving the right message. It is unlikely that the content of an advertisement for an insurance product will disclose enough information for a consumer to make a decision about purchasing that product without undertaking further investigations. In most cases, the message for consumers will be to consider the advertisement in conjunction with the relevant PDS before making a decision to purchase the product.

The challenge for issuers and distributors of insurance is making that message clear while continuing to comply with relevant laws.

You might also be interested in ...


1 A "prescribed contract" means a contract of insurance that is included in a class of contracts of insurance declared by the Insurance Contracts Regulations 1985 (Cth). It includes, for example, insurance contracts covering damage to motor vehicles and home building and contents, certain contracts covering an individual for injury, illness or death and travel insurance policies.
2 A "prescribed event", in relation to a prescribed contract, means an event that is declared by the Insurance Contracts Regulations 1985 (Cth) to be a prescribed event in relation to that contract.

Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this bulletin. Persons listed may not be admitted in all states and territories.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Mondaq Advice Centre (MACs)
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.