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Note from the Editor - April 2021

  • Newsletter Article
  • Published 08.04.2021

The avoidance of life cover (or the refusal of a claim for that matter) will never be welcome news. Life insurance cover is obviously there for a crisis and when it doesn’t respond in such times, this will undoubtedly cause distress. As ASIC acknowledged in its wide ranging 498 report however, there will be some circumstances where despite being a difficult choice to make, avoidance is the only appropriate option for an insurer to take. In this regard, we saw late last year the NSWSC uphold the insurer’s decision to avoid, in the case of Smith.

Taking this drastic step is not something life insurers do lightly and that is why the recent decision of the FCA in ASIC v TAL will be welcomed by the life industry as providing guidance on how to ensure the process of arriving at an avoidance or variation decision is impeccably fair and humane. Make no mistake, insurers wish to see this as much as anyone else. Additionally it seems that life insurers will also take comfort from the fact that many of the safeguards to ensure fairness in the process are indeed already in place through LICOP. Against this background, we examine the all important implications of this case in our lead story of this quarter’s bulletin.

Elsewhere there is plenty of regulatory news around, particularly DI cover in group, and Peter Murray covers this off in his excellent article. We also cover the HCA’s call on what is Personal Advice and deal with some interesting court/AFCA decisions on disability issues.

A big thank you to the all those who joined us for our Life Matters webinar last month on the switch to the Duty not to Misrepresent and the flip back to the old s29(3). I know Lisa Norris and Peter Riddell absolutely loved presenting this session for you (in fact we are having trouble dragging Peter away from the camera at the moment just quietly) and they both asked me to thank you all for the lovely feedback they received. Don’t hesitate to reach out if you would like a copy of the slides or recording.

Life Matters will return for the Winter session in June where we will examine the role of s54 of the ICA in life claims.

In the meantime enjoy this edition and as always, reach out to your favourite Turks life expert if you have any questions.