On the 26th of June the Insurance Contracts Amendment (Unfair Terms) Bill was introduced to the Federal Parliament. The Bill is designed to protect consumers from unfair insurance contract terms and is largely the result of increased pressure on the Commonwealth Parliament to prevent insurers relying on terms that unfairly operate in their favour.
The Australian Consumer Law currently provides protection to consumers in a range of other standard form contracts, however, the protection has not extended to insurance contracts. The Bill seeks to remedy this and encourage insurers to remove ‘unfair terms’ from general insurance contracts.
The regime is to be enforced by ASIC, however, the Bill if passed will not provide any recourse to non-consumers such as small businesses. In order to utilise the provisions of the Bill one of the parties must acquire the insurance wholly or predominantly for personal, domestic or household use and consumption.