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The Unfair Contract Terms draft bill - What will it mean for insurers?

The Unfair Contract Terms (UCT ) regime, which has historically excluded from its operation insurance contracts regulated by the Insurance Contracts Act 1984 (the ICA), is now by virtue of the fallout of the Financial Services Royal Commission set to operate to regulate standard form insurance contracts as defined under the UCT regime.

On 31 July 2019, the Department of Treasury circulated its exposure draft of the Treasury Laws Amendment (Unfair Terms in Insurance Contracts) Bill 2019, and is now seeking consultation from the wider insurance industry. The proposed changes are proposed to work in conjunction with, and not in place of, the existing ICA consumer protections and allow a court to make a declaration not only that specific terms in a particular policy wording constitute unfair terms, but that all contracts with similar wording  are unfair.
 

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