AFCA has commenced a consultation process on two new Approach documents relating to life insurance complaints.
The AFCA Approach documents are intended to provide clarity and transparency regarding AFCA’s complaint investigation and decision-making processes.
The documents under consultation are:
- The AFCA Approach to the duty to take reasonable care not to make a misrepresentation – life insurance, which outlines how AFCA considers complaints regarding the duty to take reasonable care not to make a misrepresentation in life insurance.
- The AFCA Approach to non-disclosure and misrepresentation – life insurance, which details AFCA’s approach to complaints involving the duty of disclosure and the requirement not to make a misrepresentation in life insurance.
The documents apply to non-superannuation complaints under AFCA’s Rules.
Insurers and consumers have obligations under the Insurance Contracts Act 1984 (Cth) when entering into, varying, reinstating or extending a contract of insurance.
The Act was amended to include the duty to take reasonable care not to make a misrepresentation for consumer insurance contracts.
This duty took compulsory effect on 5 October 2021.
The insurer has the onus to show there has been a breach of the Duty. To do so, it
must be able to show:
- the complainant made a misrepresentation, and
- the complainant failed to take reasonable care when making the misrepresentation.
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Author: David Jacobson
Principal, Bright Corporate Law
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About David Jacobson
The information contained in this article is not legal advice. It is not to be relied upon as a full statement of the law. You should seek professional advice for your specific needs and circumstances before acting or relying on any of the content.
