cover image: 4599 - S - LPS Submission - Joint Consultation on Superannuation Approaches

4599 - S - LPS Submission - Joint Consultation on Superannuation Approaches

11 Oct 2024

This submission is informed by the Legal Practice Section’s Australian Consumer Law Committee (ACLC) and Superannuation Committee and provides feedback on the following draft Approach Documents: (a) the draft document titled The AFCA Approach to sections 29(6) and 29(7) of the Insurance Contracts Act 1984 (ICA Approach Document); and (b) the draft document titled The AFCA Approach to delayed insur. [...] We note that the draft ICA Approach Document states (at page 4) that AFCA intends to apply the ICA as it is written—that no variation of the contract will be allowed under subsection 29(6) of the ICA, if the contract provides cover for a death benefit, pursuant to subsection 29(10) of the ICA. [...] The Superannuation Committee suggests the following addition (underlined) to the paragraph at the top of page 3 of the ICA Approach Document: Section 29(6) of the ICA does not allow an insurer to vary a contract with a surrender value, or a contract that provides insurance cover in respect of the death of the life insured—see section 29(10) of the ICA. [...] In the view of the ACLC, allowing an insurer to rely on a statutory declaration of an internal underwriter is not consistent with the legislation as it is written, and is not consistent with the Parliament’s intention, as expressed in the Explanatory Memorandum to the ICA Bill. [...] The ACLC is of the view that the evidence that AFCA ought to allow—on the question of what other reasonable and prudent insurers would have done—should be: (a) a statement of an external consultant underwriter, who does not work for the insurer; and/or (b) a statement from a person working for a reinsurer, so long as that reinsurer does not bear any liability in respect of the subject claim.

Authors

Chelsea De Silva

Pages
8
Published in
Australia

Table of Contents