INSURANCE CONTRACTS ACT 1984

This compilation was prepared on 14 July 2008
taking into account amendments up to Act No. 73 of 2008

The text of any of those amendments not in force
on that date is appended in the Notes section

The operation of amendments that have been incorporated may be
affected by application provisions that are set out in the Notes section

Prepared by the Office of Legislative Drafting and Publishing,
Attorney‑General's Department, Canberra

Contents

Part I--Preliminary 1

1............ Short title [see Note 1] ....................................................................... 1

2............ Commencement [see Note 1] .............................................................. 1

3............ Repeals ............................................................................................... 1

4............ Previous contracts .............................................................................. 2

5............ Crown to be bound ............................................................................. 2

6............ Extension to external Territories ......................................................... 2

7............ Effect of Act on other laws ................................................................ 2

8............ Application of Act ............................................................................. 3

9............ Exceptions to application of Act ........................................................ 3

9A......... Exclusion of pleasure craft from the Marine Insurance Act 1909 ...... 4

10.......... Contracts of insurance ........................................................................ 5

11.......... Interpretation ...................................................................................... 6

11AA.... Application of the Criminal Code .................................................... 10

Part IA--Administration 11

11AAA. Definition .......................................................................................... 11

11A....... ASIC responsible for general administration of Act ......................... 11

11B....... Powers of the ASIC .......................................................................... 11

11C....... Supervisory powers--ASIC may obtain insurance documents ....... 12

11D....... Supervisory powers--ASIC may review administrative arrangements etc. 13

11E........ Examination of documents by ASIC not to imply compliance with relevant legislation 14

Part II--The duty of the utmost good faith 15

12.......... This Part not to be read down .......................................................... 15

13.......... The duty of the utmost good faith ................................................... 15

14.......... Parties not to rely on provisions except in the utmost good faith ... 15

15.......... Certain other laws not to apply ....................................................... 15

Part III--Insurable interests 17

Division 1--General insurance 17

16.......... Insurable interest not required .......................................................... 17

17.......... Legal or equitable interest not required at time of loss ..................... 17

Division 2--Other contracts of insurance 18

18.......... Insurable interest not required .......................................................... 18

Division 3--Naming of persons benefited 19

20.......... Persons benefited need not be named ............................................... 19

Part IV--Disclosures and misrepresentations 20

Division 1--The duty of disclosure 20

21.......... The insured's duty of disclosure ...................................................... 20

21A....... Eligible contracts of insurance--disclosure of specified matters ...... 20

22.......... Insurer to inform of duty of disclosure ............................................ 22

Division 2--Misrepresentations 24

23.......... Ambiguous questions ....................................................................... 24

24.......... Warranties of existing facts to be representations ............................ 24

25.......... Misrepresentation by life insured .................................................... 24

26.......... Certain statements not misrepresentations ...................................... 24

27.......... Failure to answer questions .............................................................. 25

Division 3--Remedies for non‑disclosure and misrepresentation 26

28.......... General insurance .............................................................................. 26

29.......... Life insurance .................................................................................... 26

30.......... Misstatements of age ........................................................................ 28

31.......... Court may disregard avoidance in certain circumstances .................. 29

32.......... Non‑disclosure or misrepresentation by member of scheme ............ 30

32A....... Non‑disclosure or misrepresentation by holder of RSA .................. 30

33.......... No other remedies ............................................................................. 31

Part V--The contract 32

Division 1--Standard cover 32

34.......... Interpretation .................................................................................... 32

35.......... Notification of certain provisions ..................................................... 32

36.......... Interpretation of regulations ............................................................. 33

37.......... Notification of unusual terms ........................................................... 33

Division 2--General provisions relating to insurance contracts 35

38.......... Interim contracts of insurance .......................................................... 35

39.......... Instalment contracts of general insurance ......................................... 35

40.......... Certain contracts of liability insurance ............................................. 36

41.......... Liability insurance: insured may require insurer to elect .................. 36

42.......... Maximum cover for premium ........................................................... 37

43.......... Arbitration provisions ...................................................................... 37

44.......... Average provisions ........................................................................... 38

45.......... "Other insurance" provisions ........................................................... 39

46.......... Pre‑existing defect or imperfection ................................................... 40

47.......... Pre‑existing sickness or disability ..................................................... 40

48.......... Entitlement of named persons to claim ............................................ 40

48AA.... Life policy in connection with an RSA for the benefit of another person 41

48A....... Life policy for the benefit of another person ................................... 41

49.......... Where sum insured exceeds value of insured's interest .................... 42

50.......... Sale of insured property ................................................................... 44

51.......... Right of third party to recover against insurer ................................. 44

52.......... "Contracting out" prohibited ............................................................ 45

53.......... Variation of contracts of insurance ................................................... 45

Division 3--Remedies 46

54.......... Insurer may not refuse to pay claims in certain circumstances ........ 46

55.......... No other remedies ............................................................................. 47

55A....... Representative actions by the ASIC ................................................ 47

Part VI--Claims 49

56.......... Fraudulent claims .............................................................................. 49

57.......... Interest on claims .............................................................................. 49

Part VII--Expiration, renewal and cancellation 51

58.......... Insurer to notify of expiration of contracts of general insurance ...... 51

59.......... Cancellation procedure ..................................................................... 52

60.......... Cancellation of contracts of general insurance .................................. 53

61.......... Insurers in liquidation ....................................................................... 54

62.......... Cancellation of instalment contracts of general insurance ................ 55

63.......... Cancellations void ............................................................................. 55

Part VIII--Subrogation 56

65.......... Subrogation to rights against family etc. ........................................... 56

66.......... Subrogation to rights against employees .......................................... 57

67.......... Rights with respect to moneys recovered under subrogation ........... 57

68.......... Contracts affecting rights of subrogation .......................................... 58

Part IX--Information, notices and reasons 59

69.......... Giving of information to insureds ..................................................... 59

70.......... Notices to be given to life insureds in certain cases .......................... 60

71.......... Agency .............................................................................................. 60

72.......... Legibility of writing .......................................................................... 61

74.......... Policy documents to be supplied on request .................................... 61

75.......... Reasons for cancellation etc. to be given .......................................... 62

Part X--Miscellaneous 64

76.......... Contribution between insurers ......................................................... 64

76A....... Liability of directors and employees etc. ......................................... 64

77.......... Giving notices ................................................................................... 65

78.......... Regulations ....................................................................................... 65

Notes 67

Notes to the Insurance Contracts Act 1984

Note 1

The Insurance Contracts Act 1984 as shown in this compilation comprises Act No. 80, 1984 amended as indicated in the Tables below.

All relevant information pertaining to application, saving or transitional provisions prior to 22 April 1998 is not included in this compilation. For subsequent information see Table A.

Table of Acts

Act	Number and year	Date of Assent	Date of commencement	Application, saving or transitional provisions
Insurance Contracts Act 1984	80, 1984	25 June 1984	1 Jan 1986 (see Gazette 1985, No. S487)
Statute Law (Miscellaneous Provisions) Act (No. 1) 1985	65, 1985	5 June 1985	S. 3: 3 July 1985 (a)	--
Australian Trade Commission (Transitional Provisions and Consequential Amendments) Act 1985	187, 1985	16 Dec 1985	Part VIII (s. 60): 6 Jan 1986 (see Gazette 1985, No. S551) (b)	S. 60(3)
Statute Law (Miscellaneous Provisions) Act (No. 2) 1985	193, 1985	16 Dec 1985	S. 3: 1 Jan 1986 (see Gazette 1985, No. S487) (c)	S. 16
Statute Law (Miscellaneous Provisions) Act (No. 1) 1986	76, 1986	24 June 1986	S. 3: 1 Jan 1986 (see Gazette 1985, No. S487) (d)	S. 9
Statute Law (Miscellaneous Provisions) Act (No. 2) 1986	168, 1986	18 Dec 1986	S. 3: 1 Jan 1986 (e)	S. 5(1)
Export Finance and Insurance Corporation (Transitional Provisions and Consequential Amendments) Act 1991	149, 1991	21 Oct 1991	1 Nov 1991	S. 50(2)
Insurance Laws Amendment Act (No. 2) 1994	49, 1994	7 Apr 1994	Ss. 1-3 and Schedule (items 1, 2, 4, 5, 7, 7-19): Royal Assent Remainder: 1 Oct 1994 (see Gazette 1994, No. GN38)	--
Life Insurance (Consequential Amendments and Repeals) Act 1995	5, 1995	23 Feb 1995	1 July 1995 (see s. 2 and Gazette 1995, No. GN24)	--
Crimes and Other Legislation Amendment Act 1997	20, 1997	7 Apr 1997	Schedule 2 (item 6): Royal Assent (f)	--
Retirement Savings Accounts (Consequential Amendments) Act 1997	62, 1997	28 May 1997	2 June 1997 (see s. 2 and Gazette 1997, No. S202)	--
Financial Laws Amendment Act 1997	107, 1997	30 June 1997	Schedule 8: Royal Assent (g)	--
Insurance Laws Amendment Act 1998	35, 1998	22 Apr 1998	Schedule 1 (items 77-84): 30 Apr 1998 (see Gazette 1998, S188) (h)	Sch. 1 (items 82-84) [see Table A]
Financial Sector Reform (Amendments and Transitional Provisions) Act 1998	54, 1998	29 June 1998	Schedule 12: 1 July 1998 (see Gazette 1998, S316) (i)	--
Financial Sector Reform (Amendments and Transitional Provisions) Act (No. 1) 1999	44, 1999	17 June 1999	Schedule 7 (item 117): 1 July 1999 ( see Gazette 1999, No. S283) (j)	S. 3(2)(e) (am. by 160, 2000, Sch. 4 [item 4])
as amended by
Financial Sector Legislation Amendment Act (No. 1) 2000	160, 2000	21 Dec 2000	Schedule 1 (item 21): Royal Assent Remainder: 18 Jan 2001	--
Export Finance and Insurance Corporation Amendment Act 2000	11, 2000	15 Mar 2000	Schedule 1 (item 4): 1 July 1998 Schedule 2 (items 2-4): 1 July 2000 Remainder: Royal Assent	--
Treasury Legislation Amendment (Application of Criminal Code) Act (No. 3) 2001	117, 2001	18 Sept 2001	S. 4 and Schedule 3 (items 5-14): 15 Dec 2001 (k)	S. 4 [see Table A]
Financial Services Reform (Consequential Provisions) Act 2001	123, 2001	27 Sept 2001	Schedule 1 (items 246-249): 11 Mar 2002 (see Gazette 2001, No. GN42) (l)	--
Insurance and Aviation Liability Legislation Amendment Act 2002	96, 2002	10 Nov 2002	Schedule 1 (items 1-4): 23 July 1998 (see s. 2(1)) Remainder: Royal Assent	S. 4 [see Table A]
Medical Indemnity (Prudential Supervision and Product Standards) (Consequential Amendments) Act 2003	36, 2003	2 May 2003	1 July 2003	--
Private Health Insurance (Transitional Provisions and Consequential Amendments) Act 2007	32, 2007	30 Mar 2007	Schedule 2 (Item 54): 1 Apr 2007 (see s. 2(1))	--
Private Health Insurance Legislation Amendment Act 2008	54, 2008	25 June 2008	Schedule 1 (item 5): Royal Assent	--
Statute Law Revision Act 2008	73, 2008	3 July 2008	Schedule 4 (items 343-347): 4 July 2008	--

(a) The Insurance Contracts Act 1984 was amended by section 3 only of the Statute Law (Miscellaneous Provisions) Act (No. 1) 1985, subsection 2(1) of which provides as follows:

(1) Subject to this section, this Act shall come into operation on the twenty‑eighth day after the day on which it receives the Royal Assent. [see also (c)]

(b) The Insurance Contracts Act 1984 was amended by Part VIII (section 60) only of the Australian Trade Commission (Transitional Provisions and Consequential Amendments) Act 1985, subsection 2(1) of which provides as follows:

(1) Subject to subsections (2) and (3), this Act shall come into operation on the commencing day.

Section 3 of the Australian Trade Commission Act 1985 defines "commencing day" as the day fixed by Proclamation for the purposes of subsection 2(2) of that Act.

(c) The Insurance Contracts Act 1984 was amended by section 3 only of the Statute Law (Miscellaneous Provisions) Act (No. 2) 1985, subsection 2(8) of which provides as follows:

(8) Notwithstanding subsection 2(1) of the Statute Law (Miscellaneous Provisions) Act (No. 1) 1985, the amendments of the Insurance Contracts Act 1984 made by the first‑mentioned Act and the amendment of the Insurance Contracts Act 1984 made by this Act shall come into operation on the day on which the Insurance Contracts Act 1984 comes into operation.

(d) The Insurance Contracts Act 1984 was amended by section 3 only of the Statute Law (Miscellaneous Provisions) Act (No. 1) 1986, subsection 2(11) of which provides as follows:

(11) The amendments of the Insurance Contracts Act 1984 made by this Act shall be deemed to have come into operation immediately after that Act came into operation.

(e) The Insurance Contracts Act 1984 was amended by section 3 only of the Statute Law (Miscellaneous Provisions) Act (No. 2) 1986, subsections 2(1) and (6) of which provide as follows:

(1) Subject to this section, this Act shall come into operation on the day on which it receives the Royal Assent.

(6) The amendments of section 11 of the Insurance Contracts Act 1984 made by this Act shall be deemed to have come into operation on 1 January 1986.

(f) The Insurance Contracts Act 1984 was amended by Schedule 2 (item 6) only of the Crimes and Other Legislation Amendment Act 1997, subsection 2(1) of which provides as follows:

(1) Subject to subsection (2), this Act commences on the day on which it receives the Royal Assent.

(g) The Insurance Contracts Act 1984 was amended by Schedule 8 only of the Financial Laws Amendment Act 1997, subsection 2(1) of which provides as follows:

(1) Subject to this section, this Act commences on the day on which it receives the Royal Assent.

(h) The Insurance Contracts Act 1984 was amended by Schedule 1 (items 77-84) only of the Insurance Laws Amendment Act 1998, subsection 2(2) of which provides as follows:

(2) Subject to subsection (3), Schedule 1 commences on a day to be fixed by Proclamation.

(i) The Insurance Contracts Act 1984 was amended by Schedule 12 only of the Financial Sector Reform (Amendments and Transitional Provisions) Act 1998, subsection 2(2)(j) of which provides as follows:

(2) The following provisions of this Act commence on the commencement of the Australian Prudential Regulation Authority Act 1998:

(j) Schedule 12, subject to subsection (12);

(j) The Insurance Contracts Act 1984 was amended by Schedule 7 (item 117) only of the Financial Sector Reform (Amendments and Transitional Provisions) Act (No. 1) 1999, subsections 3(2)(e) and (16) of which provide as follows:

(2) The following provisions commence on the transfer date:

(e) subject to subsection (12), Schedule 7, other than items 43, 44, 118, 205 and 207 (the commencement of those items is covered by subsections (10), (11) and (13)).

(16) The Governor‑General may, by Proclamation published in the Gazette, specify the date that is to be the transfer date for the purposes of this Act.

(k) The Insurance Contracts Act 1984 was amended by Schedule 3 (item 5-14) only of the Treasury Legislation Amendment (Application of Criminal Code) Act (No. 3) 2001, subsection 2(1) of which provides as follows:

(1) Subject to this section, this Act commences on the day mentioned in subsection 2.2(2) of the Criminal Code.

(l) The Insurance Contracts Act 1984 was amended by Schedule 1 (items 246-249) only of the Financial Services Reform (Consequential Provisions) Act 2001, subsections 2(1) and (6) of which provide as follows:

(1) In this section :

FSR commencement means the commencement of item 1 of Schedule 1 to the Financial Services Reform Act 2001.

(6) Subject to subsections (7) to (17), the other items of Schedule 1 commence on the FSR commencement.

Table of Amendments

ad. = added or inserted am. = amended rep. = repealed rs. = repealed and substituted
Provision affected	How affected
Part I
S. 9...................................	am. Nos. 65 and 187, 1985; No. 76, 1986; No. 149, 1991; No. 107, 1997; No. 11, 2000; No. 96, 2002; No. 32, 2007; No. 54, 2008
S. 9A.................................	ad. No. 35, 1998
S. 11.................................	am. No. 65, 1985; No. 168, 1986; No. 49, 1994; No. 5, 1995; Nos. 62 and 107, 1997; No. 54, 1998; No. 44, 1999; No. 123, 2001
S. 11AA............................	ad. No. 117, 2001
Part IA
Part IA ..............................	ad. No. 49, 1994
S. 11AAA.........................	ad. No. 36, 2003
S. 11A...............................	ad. No. 49, 1994
	rs. No. 54, 1998
Heading to s. 11B.............	am. No. 54, 1998
S. 11B...............................	ad. No. 49, 1994
	am. No. 54, 1998; No. 36, 2003
Heading to s. 11C.............	am. No. 54, 1998
S. 11C...............................	ad. No. 49, 1994
	am. No. 54, 1998; No. 117, 2001; No. 36, 2003
Note to s. 11C(3)..............	ad. No. 117, 2001
Note to s. 11C(4)..............	ad. No. 117, 2001
Heading to s. 11D.............	am. No. 54, 1998
S. 11D...............................	ad. No. 49, 1994
	am. No. 54, 1998; No. 117, 2001; No. 36, 2003
Note to s. 11D(4)..............	ad. No. 117, 2001
Note to s. 11D(5)..............	ad. No. 117, 2001
Heading to s. 11E..............	am. No. 54, 1998; No. 36, 2003
S. 11E...............................	ad. No. 49, 1994
	am. No. 54, 1998; No. 36, 2003
S. 11F...............................	ad. No. 49, 1994
	rs. No. 107, 1997
	rep. No. 54, 1998
Ss. 11G, 11H....................	ad. No. 49, 1994
	rep. No. 54, 1998
Part II
S. 15.................................	rs. No. 65, 1985; No. 49, 1994
Part III
Division 1
S. 16.................................	am. No. 5, 1995
Division 2
Div. 2 of Part III .................	rs. No. 5, 1995
S. 18.................................	rs. No. 5, 1995
S. 19.................................	rep. No. 5, 1995
Part IV
Division 1
S. 21.................................	am. No. 107, 1997
S. 21A...............................	ad. No. 35, 1998
S. 22.................................	am. No. 35, 1998
Division 2
S. 26.................................	am. Nos. 62 and 107, 1997
S. 27.................................	am. No. 107, 1997
Division 3
Ss. 28, 29.........................	am. No. 107, 1997
S. 32A...............................	ad. No. 62, 1997
Part V
Division 1
S. 35.................................	am. Nos. 65 and 193, 1985; No. 107, 1997
S. 37.................................	am. No. 65, 1985; No. 168, 1986
Division 2
S. 40.................................	am. No. 49, 1994
S. 41.................................	am. No. 65, 1985; No. 107, 1997
S. 44.................................	am. No. 107, 1997
Ss. 46, 47.........................	am. No. 107, 1997
S. 48.................................	am. No. 5, 1995; No. 107, 1997; No. 73, 2008
S. 48AA............................	ad. No. 62, 1997
S. 48A...............................	ad. No. 5, 1995
S. 49.................................	am. No. 168, 1986; No. 107, 1997
S. 51.................................	am. No. 107, 1997
Division 3
S. 54.................................	am. No. 65, 1985; No. 107, 1997
Heading to s. 55A.............	am. No. 54, 1998
S. 55A...............................	ad. No. 49, 1994
	am. No. 54, 1998
Part VI
S. 57.................................	am. No. 107, 1997; No. 35, 1998
Part VII
S. 58.................................	am. No. 168, 1986; No. 107, 1997
S. 59.................................	am. No. 5, 1995; No. 107, 1997
Heading to s. 64................	am. No. 49, 1994
	rep. No. 123, 2001
S. 64.................................	am. No. 49, 1994; No. 5, 1995; Nos. 62 and 107, 1997
	rep. No. 123, 2001
S. 64A...............................	ad. No. 49, 1994
	rep. No. 123, 2001
S. 64B...............................	ad. No. 5, 1995
	rep. No. 123, 2001
Part VIII
S. 65.................................	am. No. 49, 1994; No. 107, 1997; No. 73, 2008
S. 66.................................	am. No. 107, 1997; No. 54, 1998
S. 68.................................	am. No. 107, 1997
Part IX
S. 69.................................	am. No. 65, 1985; No. 168, 1986; No. 35, 1998
S. 71.................................	am. No. 168, 1986
S. 71A...............................	ad. No. 49, 1994
	rep. No. 123, 2001
S. 72.................................	am. No. 107, 1997
S. 73.................................	am. No. 65, 1985; Nos. 76 and 168, 1986; No. 49, 1994
	rep. No. 123, 2001
S. 74.................................	am. No. 49, 1994; No. 107, 1997
Note to s. 74(2).................	ad. No. 117, 2001
S. 75.................................	am. No. 49, 1994; Nos. 20 and 107, 1997; No. 73, 2008
Note to s. 75(3).................	ad. No. 117, 2001
Note to s. 75(7).................	ad. No. 117, 2001
Part X
S. 76.................................	am. No. 107, 1997
S. 76A...............................	ad. No. 49, 1994
S. 77.................................	am. No. 107, 1997

Commonwealth Consolidated Acts

INSURANCE CONTRACTS ACT 1984 - NOTES