The Australian Securities and Investments Commission (ASIC) has updated its information sheets on new protections under unfair contract term laws for consumers and small businesses.
The protections will be extended to insurance contracts following the government’s enactment of the Financial Sector Reform Act 2020, and the changes will commence on April 05, 2021.
As part of the update, information sheets 210 (INFO 210) and 211 (INFO 211) now provide information about how the unfair contract terms will apply to insurance contracts from April 05, 2021.
“In preparation for the unfair contract term protections applying to insurance contracts, ASIC is undertaking targeted supervisory work with industry,” the regulator said.
ASIC has been working with insurers and other industry groups to inform the industry about its new responsibilities.
Its supervisory work focuses on terms that allow an insurer to cash settle a claim based on the cost of repair to the insurer, terms that are a necessary barrier to a consumer filing a claim, terms that reduce the cover offered where compliance with the preconditions is unfeasible, and terms that use an outdated medical definition.
ASIC confirmed that it will continue to work with the sector in the lead up to the commencement of the new laws.
