Australian insurance law
Encyclopedia
Australian insurance law is a term which refers to the body of law
which regulates the insurance
industry and insurance
contracts within Australia
. Commonwealth Parliament
gains authority to make laws with respect to insurance and insurance companies under section 51
XIV and XX
of the Australian Constitution. Generally, the Insurance Act 1973 and Insurance Contracts Act 1984 are the main acts to which the body of law refers, however there are a number of other pieces of legislation enacted by the states, private codes and volumous case law
all of which forms this body of law.
Chapter 7 of the Corporations Act 2001 (Cth) regulates the way in which insurers and insurance agents and brokers carry on business and how they deal with the people they do business with and intend to do business with.
The Insurance Contracts Act 1984 applies to most insurance contracts with an Australian connection and is intended to ensure that a fair balance is struck between the interests of the insurer and the insured.
(APRA) has the power pursuant to the 'Insurance Act 1973 to investigate a general insurer, freeze its assets or direct it to take specific action (for example, stop writing new business).
The Australian Securities and Investment Commission (ASIC) is responsible for the general administration of the ICA.
Law
Law is a system of rules and guidelines which are enforced through social institutions to govern behavior, wherever possible. It shapes politics, economics and society in numerous ways and serves as a social mediator of relations between people. Contract law regulates everything from buying a bus...
which regulates the insurance
Insurance in Australia
Australia has a sophisticated and well-developed insurance market, which can be divided into roughly three components: life insurance, general insurance and health insurance...
industry and insurance
Insurance
In law and economics, insurance is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for payment. An insurer is a company selling the...
contracts within Australia
Australia
Australia , officially the Commonwealth of Australia, is a country in the Southern Hemisphere comprising the mainland of the Australian continent, the island of Tasmania, and numerous smaller islands in the Indian and Pacific Oceans. It is the world's sixth-largest country by total area...
. Commonwealth Parliament
Parliament of Australia
The Parliament of Australia, also known as the Commonwealth Parliament or Federal Parliament, is the legislative branch of the government of Australia. It is bicameral, largely modelled in the Westminster tradition, but with some influences from the United States Congress...
gains authority to make laws with respect to insurance and insurance companies under section 51
Section 51 of the Australian Constitution
Section 51 of the Constitution of Australia grants legislative powers to the Australian Parliament only when subject to the constitution. When the six Australian colonies joined together in Federation in 1901, they became the original States and ceded some of their powers to the new Commonwealth...
XIV and XX
Section 51(xx) of the Australian Constitution
Section 51 of the Australian Constitution, is a subsection of Section 51 of the Australian Constitution that gives the Commonwealth Parliament the right to legislate with respect to "foreign corporations, and trading or financial corporations formed within the limits of the Commonwealth"...
of the Australian Constitution. Generally, the Insurance Act 1973 and Insurance Contracts Act 1984 are the main acts to which the body of law refers, however there are a number of other pieces of legislation enacted by the states, private codes and volumous case law
Case law
In law, case law is the set of reported judicial decisions of selected appellate courts and other courts of first instance which make new interpretations of the law and, therefore, can be cited as precedents in a process known as stare decisis...
all of which forms this body of law.
Legislation
The Insurance Act 1973 (Cth) requires minimum levels of capital and solvency for companies wanting to enter the insurance market and for insurers in the market.Chapter 7 of the Corporations Act 2001 (Cth) regulates the way in which insurers and insurance agents and brokers carry on business and how they deal with the people they do business with and intend to do business with.
The Insurance Contracts Act 1984 applies to most insurance contracts with an Australian connection and is intended to ensure that a fair balance is struck between the interests of the insurer and the insured.
Regulators
The Australian Prudential Regulation AuthorityAustralian Prudential Regulation Authority
The Australian Prudential Regulation Authority is a statutory authority and the prudential regulator of the Australian financial services industry.-Regulatory scope:...
(APRA) has the power pursuant to the 'Insurance Act 1973 to investigate a general insurer, freeze its assets or direct it to take specific action (for example, stop writing new business).
The Australian Securities and Investment Commission (ASIC) is responsible for the general administration of the ICA.
Insurance contract
The formation of an insurance contract is governed by ordinary contractual principles.Code of Practice
The General Insurance Code of Practice is a self regulatory code that binds all general insurers who are signatories to it. It has been approved by ASIC pursuant to s 1101A of the Corporations Act 2001 (Cth).Financial Ombudsman Service
If a person doesn't agree with the outcome of the insurer's Internal Dispute Resolution (IDR) process, they can contact the Financial Ombudsman Service with a request that the Service resolve the dispute.External links
- Insurance Contracts Act 1984
- Insurance (Agents & Brokers) Act 1984
- Financial Services Reform Act 2001
- Australian Prudential Regulatory Authority
- Australian Securities and Investment Commission
- Australian Insurance Law Association
- Insurance Council of Australia
- Insurance Ombudsman Service (IOS)
- Clayton Utz Law Firm - Insurance and Risk
Further reading
- Greg Pynt, Australian Insurance Law: A First Reference (Chatswood: LexisNexis Butterworths, 2008).
- Peter Mann and Candace Lewis, Annotated Insurance Contracts Act, 4th edition (Pyrmont: Lawbook Co., 2003).