Insurers have waited patiently since the 2013 amendments to the
Insurance Contracts Act 1984 (Cth) (the Act) for guidance
on changes to duty of disclosure notices necessitated by amendments
to sections 21, 21A and 22, together with the new section 21B
(applying to renewals), of the Act.
With the deadline for implementation of the new notices looming
on 28 December this year, guidance was finally provided when the
Insurance Contracts Amendment Regulation 2015 (No.1) (Cth)
came into effect on 21 April 2015.
The standard wording for general insurance contracts has only
been slightly altered. The recommended wording for contracts of
life insurance has been amplified. It is important to note that the
regulations only provide a recommended wording and insurers are
free to "clearly inform" insureds in writing of the
nature and effect of the duty of disclosure, as required by section
22, as they see fit. That said, in the interests of caution most
insurers closely follow the recommended wording.
Although in some respects the duty of disclosure procedure has
been simplified, particularly for renewals upon the implementation
of section 21B, this has introduced multiple variants of the duty
of disclosure notice applying variously at the first time an
insured enters into a contract, renewal and upon variation,
extension or reinstatement. This may lead to complications where
insurers need to determine which disclosure notice is appropriate.
Some insurers may find it easier to simply explain the various
options at all times.
Guidance was also provided on the new reminder notices, required
by subsection 22(3) where an insurer accepts an offer or makes a
counter-offer two months after the insured's most recent
disclosure. This disclosure obligation only applies to "new
matters". However, the form of the reminder does not appear to
accommodate the new renewal procedures under section 21B.
Insurers now have the remainder of the year (until 28 December
2015) to consider and implement the recommendations. Early
consideration of the changes is suggested to ensure all procedural
and other systems requirements are addressed in time.
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The failure of a party to call a witness does not necessarily give rise to an adverse inference being drawn in accordance with Jones v Dunkel (1959) 101 CLR 298. An unfavourable inference is drawn only if evidence otherwise provides a basis on which that unfavourable inference can be drawn.
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