The Australian Securities and Investments Commission (ASIC) has announced it is commencing proceedings against Youi for alleged breaches of the Insurance Contracts Act 1984.
The allegations relate to Youi’s duty of utmost good faith in handling a building and contents insurance claim made by a policyholder, which was first initiated in January 2017 following a November 2016 severe hailstorm in Broken Hill.
ASIC alleges that Youi failed to meet the standard imposed by the duty in handling the claim resulting from the near two years it took to settle the claim, with repairs only being completed on the home in November 2018.
As such, ASIC is seeking declarations in relation to s13 of the Insurance Contracts Act.
During the time of Youi’s alleged conduct, the Insurance Contracts Act did not impose any pecuniary penalties for a breach of the duty of utmost good faith, and, as such, ASIC seeks declaration in these proceedings that Youi breached the duty.
On March 13, 2019, the law was changed that enabled ASIC to seek pecuniary penalties after that date for any company found to have been in breach of that duty.
Insurance Business Australia has contacted ASIC and Youi for comment on this story.
