Commonwealth Consolidated Acts Commonwealth Consolidated ActsNo. 80, 1984
Compilation date: 8 December 2021
Includes amendments up to: Act No. 127, 2021
Registered: 6 January 2022
About this compilation
This compilation
This is a compilation of the Insurance Contracts Act 1984 that shows the text of the law as amended and in force on 8 December 2021 (the compilation date).
The notes at the end of this compilation (the endnotes) include information about amending laws and the amendment history of provisions of the compiled law.
Uncommenced amendments
The effect of uncommenced amendments is not shown in the text of the compiled law. Any uncommenced amendments affecting the law are accessible on the Legislation Register (www.legislation.gov.au). The details of amendments made up to, but not commenced at, the compilation date are underlined in the endnotes. For more information on any uncommenced amendments, see the series page on the Legislation Register for the compiled law.
Application, saving and transitional provisions for provisions and amendments
If the operation of a provision or amendment of the compiled law is affected by an application, saving or transitional provision that is not included in this compilation, details are included in the endnotes.
Editorial changes
For more information about any editorial changes made in this compilation, see the endnotes.
Modifications
If the compiled law is modified by another law, the compiled law operates as modified but the modification does not amend the text of the law. Accordingly, this compilation does not show the text of the compiled law as modified. For more information on any modifications, see the series page on the Legislation Register for the compiled law.
Self-repealing provisions
If a provision of the compiled law has been repealed in accordance with a provision of the law, details are included in the endnotes.
Contents
Part I--Preliminary 1
1............ Short title............................................................................................. 1
2............ Commencement................................................................................... 1
3............ Repeals................................................................................................ 1
4............ Previous contracts............................................................................... 2
5............ Crown to be bound............................................................................. 2
6............ Extension to external Territories.......................................................... 2
7............ Effect of Act on other laws................................................................. 2
8............ Application of Act............................................................................... 3
9............ Exceptions to application of Act.......................................................... 3
9A......... Exclusion of pleasure craft from the Marine Insurance Act 1909....... 6
10.......... Contracts of insurance......................................................................... 7
11.......... Interpretation....................................................................................... 7
11AA.... Application of the Criminal Code..................................................... 14
11AB.... Consumer insurance contracts........................................................... 14
Part IA--Administration 16
11AAA. Definition.......................................................................................... 16
11A....... ASIC responsible for general administration of Act......................... 16
11B....... Powers of the ASIC.......................................................................... 16
11C....... Supervisory powers--ASIC may obtain insurance documents........ 17
11D....... Supervisory powers--ASIC may review administrative arrangements etc. 18
11DA.... Supervisory powers--liability of directors, employees and agents of insurers 19
11E........ Examination of documents by ASIC not to imply compliance with relevant legislation 20
11F........ ASIC's power to intervene in proceedings....................................... 21
Part II--The duty of the utmost good faith 22
12.......... This Part not to be read down........................................................... 22
13.......... The duty of the utmost good faith..................................................... 22
14.......... Parties not to rely on provisions except in the utmost good faith...... 23
14A....... Powers of ASIC--insurer's failure to comply with the duty of the utmost good faith in relation to handling or settlement of claims............................................................................................ 23
15.......... Certain other laws not to apply.......................................................... 24
Part III--Insurable interests 25
Division 1--General insurance 25
16.......... Insurable interest not required........................................................... 25
17.......... Legal or equitable interest not required at time of loss....................... 25
Division 2--Other contracts of insurance 26
18.......... Insurable interest not required........................................................... 26
Division 3--Naming of persons benefited 27
20.......... Persons benefited need not be named................................................ 27
Part IV--Disclosures and misrepresentations 28
Division 1A--Consumer insurance contracts: insured's duty to take reasonable care not to make a misrepresentation 28
20A....... Application of this Division.............................................................. 28
20B....... The insured's duty to take reasonable care not to make a misrepresentation 28
20C....... Warranties of existing facts to be representations.............................. 29
Division 1--Other contracts: insured's duty of disclosure 30
20E........ Application of this Division.............................................................. 30
21.......... The insured's duty of disclosure....................................................... 30
22.......... Insurer to inform of duty of disclosure............................................. 31
Division 2--Other contracts: misrepresentations by insured 33
23A....... Application of this Division.............................................................. 33
23.......... Ambiguous questions....................................................................... 33
24.......... Warranties of existing facts to be representations.............................. 33
25.......... Misrepresentation by life insured...................................................... 34
26.......... Certain statements not misrepresentations......................................... 34
27.......... Failure to answer questions............................................................... 34
Division 3--Remedies for relevant failures 35
27AA.... Meaning of relevant failure............................................................... 35
27A....... Certain contracts of life insurance may be treated as if they comprised 2 or more separate contracts of life insurance.......................................................................................................... 35
28.......... General insurance.............................................................................. 37
29.......... Life insurance.................................................................................... 37
30.......... Misstatements of age......................................................................... 40
31.......... Court may disregard avoidance in certain circumstances................... 42
32.......... Relevant failure by life insured covered under group life contract..... 42
32A....... Relevant failure by holder of RSA.................................................... 43
33.......... No other remedies............................................................................. 43
Division 4--Key Facts Sheets 44
33A....... Application of this Division.............................................................. 44
33B....... What is a Key Facts Sheet?................................................................ 44
33C....... Insurer's obligation to provide Key Facts Sheet................................ 44
33D....... Provision of Key Facts Sheet does not constitute clearly informing.. 45
Part V--The contract 46
Division 1--Standard cover 46
34.......... Interpretation..................................................................................... 46
35.......... Notification of certain provisions...................................................... 46
36.......... Interpretation of regulations.............................................................. 47
37.......... Notification of unusual terms............................................................ 47
Division 1A--Definition of flood 49
37A....... Application of this Division.............................................................. 49
37B....... Meaning of flood in prescribed contracts etc..................................... 49
37C....... Insurer must clearly inform insured whether prescribed contract provides insurance cover in respect of flood 50
37D....... Circumstances in which prescribed contract is taken to provide insurance cover etc. in respect of flood 50
37E........ Division not to affect provision of insurance cover for certain events 51
Division 2--General provisions relating to insurance contracts 52
38.......... Interim contracts of insurance........................................................... 52
39.......... Instalment contracts of general insurance.......................................... 53
40.......... Certain contracts of liability insurance............................................... 53
41.......... Contracts of liability insurance--consent of insurer required for settlement etc. of claim 54
42.......... Maximum cover for premium........................................................... 55
43.......... Arbitration provisions....................................................................... 55
44.......... Average provisions........................................................................... 55
45.......... "Other insurance" provisions............................................................ 57
46.......... Pre-existing defect or imperfection.................................................... 57
47.......... Pre-existing sickness or disability..................................................... 58
48.......... Contracts of general insurance--entitlements of third party beneficiaries 58
48AA.... Life policy in connection with RSA for the benefit of third party beneficiary 59
48A....... Life policy for the benefit of third party beneficiary.......................... 59
49.......... Where sum insured exceeds value of insured's interest.................... 60
50.......... Sale of insured property.................................................................... 62
51.......... Claims against insurer in respect of liability of insured or third party beneficiary 63
52.......... "Contracting out" prohibited............................................................. 63
53.......... Variation of contracts of insurance.................................................... 64
Division 3--Remedies 65
54.......... Insurer may not refuse to pay claims in certain circumstances.......... 65
55.......... No other remedies............................................................................. 66
55A....... Representative actions by the ASIC.................................................. 66
Part VI--Claims 68
56.......... Fraudulent claims.............................................................................. 68
57.......... Interest on claims.............................................................................. 68
Part VII--Expiration, renewal and cancellation 70
58.......... Insurer to notify of expiration of contracts of general insurance....... 70
59.......... Cancellation procedure...................................................................... 72
59A....... Cancellation of contracts of life insurance......................................... 72
60.......... Cancellation of contracts of general insurance................................... 74
61.......... Insurers in liquidation....................................................................... 75
62.......... Cancellation of instalment contracts of general insurance.................. 75
63.......... Cancellations of contracts of insurance void..................................... 75
Part VIII--Subrogation 76
64.......... Application to third party beneficiaries.............................................. 76
65.......... Subrogation to rights against family etc............................................ 76
66.......... Subrogation to rights against employees........................................... 77
67.......... Rights with respect to money recovered under subrogation etc......... 77
68.......... Contracts affecting rights of subrogation.......................................... 81
Part IX--Information, notices and reasons 82
69.......... Giving of information to insureds..................................................... 82
70.......... Notices to be given to life insureds in certain cases........................... 83
71.......... Agency.............................................................................................. 84
72.......... Content and other requirements for notices etc. to be given in writing 84
72A....... Method for giving written notices or documents............................... 85
74.......... Policy documents to be supplied on request...................................... 85
75.......... Reasons for cancellation etc. to be given........................................... 85
Part IXA--Enforcement 88
Division 1--Civil penalty provisions 88
Subdivision A--Obtaining a pecuniary penalty order 88
75A....... Declaration of contravention of civil penalty provision..................... 88
75B....... Pecuniary penalty orders................................................................... 89
75C....... Maximum pecuniary penalty............................................................. 89
75D....... Pecuniary penalty applicable............................................................. 90
75E........ Civil enforcement of pecuniary penalty orders.................................. 91
75F........ Meaning of benefit derived and detriment avoided because of a contravention of a civil penalty provision 91
75G....... Conduct contravening more than one civil penalty provision............ 91
75H....... Multiple contraventions..................................................................... 91
75J........ Proceedings may be heard together................................................... 92
75K....... Civil evidence and procedure rules for pecuniary penalty orders...... 92
Subdivision B--Civil proceedings and criminal proceedings 92
75L........ Civil proceedings after criminal proceedings..................................... 92
75M...... Criminal proceedings during civil proceedings................................. 92
75N....... Criminal proceedings after civil proceedings..................................... 93
75P........ Evidence given in civil proceedings not admissible in criminal proceedings 93
Subdivision C--Miscellaneous 94
75Q....... Attempt and involvement in contravention treated in same way as actual contravention 94
75R....... Continuing contraventions of civil penalty provisions...................... 94
75S........ State of mind..................................................................................... 94
75T........ Mistake of fact.................................................................................. 95
75U....... Exceptions etc. to civil penalty provisions--burden of proof............ 96
75V....... Civil penalty provisions contravened by employees, agents or officers 96
Division 2--Infringement notices 97
75W...... When an infringement notice may be given....................................... 97
75X....... Provisions subject to an infringement notice..................................... 97
75Y....... Matters to be included in an infringement notice............................... 98
75Z........ Payment period............................................................................... 100
75ZA..... Extension of time to pay amount..................................................... 102
75ZB..... Payment by instalments................................................................... 103
75ZC..... Withdrawal of an infringement notice............................................. 104
75ZD..... Effect of payment of amount........................................................... 106
75ZE..... Effect of this Division..................................................................... 107
Part X--Miscellaneous 108
76.......... Contribution between insurers........................................................ 108
78.......... Regulations..................................................................................... 108
Endnotes 109
Endnote 1--About the endnotes 109
Endnote 2--Abbreviation key 111
Endnote 3--Legislation history 112
Endnote 4--Amendment history 119
The endnotes provide information about this compilation and the compiled law.
The following endnotes are included in every compilation:
Endnote 1--About the endnotes
Endnote 2--Abbreviation key
Endnote 3--Legislation history
Endnote 4--Amendment history
Abbreviation key--Endnote 2
The abbreviation key sets out abbreviations that may be used in the endnotes.
Legislation history and amendment history--Endnotes 3 and 4
Amending laws are annotated in the legislation history and amendment history.
The legislation history in endnote 3 provides information about each law that has amended (or will amend) the compiled law. The information includes commencement details for amending laws and details of any application, saving or transitional provisions that are not included in this compilation.
The amendment history in endnote 4 provides information about amendments at the provision (generally section or equivalent) level. It also includes information about any provision of the compiled law that has been repealed in accordance with a provision of the law.
Editorial changes
The Legislation Act 2003 authorises First Parliamentary Counsel to make editorial and presentational changes to a compiled law in preparing a compilation of the law for registration. The changes must not change the effect of the law. Editorial changes take effect from the compilation registration date.
If the compilation includes editorial changes, the endnotes include a brief outline of the changes in general terms. Full details of any changes can be obtained from the Office of Parliamentary Counsel.
Misdescribed amendments
A misdescribed amendment is an amendment that does not accurately describe the amendment to be made. If, despite the misdescription, the amendment can be given effect as intended, the amendment is incorporated into the compiled law and the abbreviation "(md)" added to the details of the amendment included in the amendment history.
If a misdescribed amendment cannot be given effect as intended, the abbreviation "(md not incorp)" is added to the details of the amendment included in the amendment history.
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ad = added or inserted |
o = order(s) |
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am = amended |
Ord = Ordinance |
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amdt = amendment |
orig = original |
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c = clause(s) |
par = paragraph(s)/subparagraph(s) |
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C[x] = Compilation No. x |
/sub-subparagraph(s) |
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Ch = Chapter(s) |
pres = present |
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def = definition(s) |
prev = previous |
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Dict = Dictionary |
(prev ... ) = previously |
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disallowed = disallowed by Parliament |
Pt = Part(s) |
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Div = Division(s) |
r = regulation(s)/rule(s) |
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ed = editorial change |
reloc = relocated |
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exp = expires/expired or ceases/ceased to have |
renum = renumbered |
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effect |
rep = repealed |
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F = Federal Register of Legislation |
rs = repealed and substituted |
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gaz = gazette |
s = section(s)/subsection(s) |
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LA = Legislation Act 2003 |
Sch = Schedule(s) |
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Sdiv = Subdivision(s) |
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(md) = misdescribed amendment can be given |
SLI = Select Legislative Instrument |
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effect |
SR = Statutory Rules |
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(md not incorp) = misdescribed amendment |
Sub-Ch = Sub-Chapter(s) |
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cannot be given effect |
SubPt = Subpart(s) |
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mod = modified/modification |
underlining = whole or part not |
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No. = Number(s) |
commenced or to be commenced |
Endnote 3--Legislation history
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Act |
Number and year |
Assent |
Commencement |
Application, saving and transitional provisions |
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80, 1984 |
25 June 1984 |
1 Jan 1986 (gaz 1985, No S487) |
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65, 1985 |
5 June 1985 |
Sch 1: 3 July 1985 (s 2(1)) |
-- |
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Australian Trade Commission (Transitional Provisions and Consequential Amendments) Act 1985 |
187, 1985 |
16 Dec 1985 |
Sch 4: 6 Jan 1986 (gaz 1985, No S551) |
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193, 1985 |
16 Dec 1985 |
Sch 1: 1 Jan 1986 (s 2(8)) |
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76, 1986 |
24 June 1986 |
Sch 1: 1 Jan 1986 (s 2(11)) |
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168, 1986 |
18 Dec 1986 |
Sch 1: 1 Jan 1986 (s 2(6)) |
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Export Finance and Insurance Corporation (Transitional Provisions and Consequential Amendments) Act 1991 |
149, 1991 |
21 Oct 1991 |
1 Nov 1991 |
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49, 1994 |
7 Apr 1994 |
Sch (items 2, 4, 5, 7, 17): 7 Apr 1994 (s 2(1)) |
-- |
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Life Insurance (Consequential Amendments and Repeals) Act 1995 |
5, 1995 |
23 Feb 1995 |
1 July 1995 (s 2 and gaz 1995, No GN24) |
-- |
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20, 1997 |
7 Apr 1997 |
Sch 2 (item 6): 7 Apr 1997 (s 2(1)) |
-- |
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Retirement Savings Accounts (Consequential Amendments) Act 1997 |
62, 1997 |
28 May 1997 |
2 June 1997 (s 2 and gaz 1997, No S202) |
-- |
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107, 1997 |
30 June 1997 |
Sch 8: 30 June 1997 (s 2(1)) |
-- |
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35, 1998 |
22 Apr 1998 |
Sch 1 (items 77-84): 30 Apr 1998 (s 2(2)) |
Sch 1 (items 82-84) |
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Financial Sector Reform (Amendments and Transitional Provisions) Act 1998 |
54, 1998 |
29 June 1998 |
Sch 12: 1 July 1998 (s 2(2)(j)) |
-- |
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Financial Sector Reform (Amendments and Transitional Provisions) Act (No. 1) 1999 |
44, 1999 |
17 June 1999 |
Sch 7 (item 117): 1 July 1999 (s 3(2)(e), (16) and gaz 1999, No S283) |
-- |
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as amended by |
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160, 2000 |
21 Dec 2000 |
Sch 4 (items 4, 5): 18 Jan 2001) (s 2(1)) |
-- |
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11, 2000 |
15 Mar 2000 |
Schedule 1 (item 4): 1 July 1998 |
-- |
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Treasury Legislation Amendment (Application of Criminal Code) Act (No. 3) 2001 |
117, 2001 |
18 Sept 2001 |
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Financial Services Reform (Consequential Provisions) Act 2001 |
123, 2001 |
27 Sept 2001 |
Sch 1 (items 246-249): 11 Mar 2002 (s 2(1) and (6)) |
-- |
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Insurance and Aviation Liability Legislation Amendment Act 2002 |
96, 2002 |
10 Nov 2002 |
Schedule 1 (items 1-4): 23 July 1998 (see s. 2(1)) |
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Medical Indemnity (Prudential Supervision and Product Standards) (Consequential Amendments) Act 2003 |
36, 2003 |
2 May 2003 |
1 July 2003 |
-- |
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Private Health Insurance (Transitional Provisions and Consequential Amendments) Act 2007 |
32, 2007 |
30 Mar 2007 |
Schedule 2 (item 54): 1 Apr 2007 (see s. 2(1)) |
-- |
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54, 2008 |
25 June 2008 |
Sch 1 (item 5): 25 June 2008 (s 2) |
-- |
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73, 2008 |
3 July 2008 |
Sch 4 (items 343-347): 4 July 2008 (s 2(1) item 64) |
-- |
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41, 2012 |
15 Apr 2012 |
15 Apr 2012 (s 2) |
-- |
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180, 2012 |
10 Dec 2012 |
Sch 6 (items 20-22) and Sch 7: 11 Dec 2012 (s 2) |
Sch 7 |
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75, 2013 |
28 June 2013 |
Sch 1, Sch 3, Sch 4 (items 3-5), Sch 5 (items 1-3, 12-17) and Sch 6 (items 23-29): 28 June 2013 (s 2(1) items 2, 4, 6, 9, 11, 13) |
Sch 1 (items 6, 8, 10), Sch 2 (item 9), Sch 3 (item 2), Sch 4 (items 2, 7, 8, 13, 15), Sch 5 (items 3, 11, 14, 17), Sch 6 (items 2, 14, 17, 22, 29, 40) and Sch 7 (item 3) |
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33, 2016 |
23 Mar 2016 |
Sch 5 (item 74): 1 July 2016 (s 2(1) item 7) |
-- |
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Treasury Laws Amendment (Strengthening Corporate and Financial Sector Penalties) Act 2019 |
17, 2019 |
12 Mar 2019 |
Sch 4: 13 Mar 2019 (s 2(1) item 2) |
Sch 4 (item 5) |
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2, 2020 |
17 Feb 2020 |
Sch 1 (items 8-10): 5 Apr 2021 (s 2(1) item 2) |
Sch 1 (item 10) |
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Treasury Laws Amendment (2019 Measures No. 3) Act 2020 |
64, 2020 |
22 June 2020 |
Sch 3 (items 253, 325, 326): 1 Oct 2020 (s 2(1) item 6) |
Sch 3 (items 325, 326) |
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Financial Sector Reform (Hayne Royal Commission Response) Act 2020 |
135, 2020 |
17 Dec 2020 |
Sch 2: 1 Jan 2021 (s 2(1) items 3, 4) |
Sch 2 (items 2, 37) |
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13, 2021 |
1 Mar 2021 |
Sch 2 (item 476): 1 Sept 2021 (s 2(1) item 5) |
-- |
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Treasury Laws Amendment (2021 Measures No. 5) Act 2021 |
127, 2021 |
7 Dec 2021 |
Sch 3 (items 24-27): 8 Dec 2021 (s 2(1) item 4) |
-- |