INSURANCE CONTRACTS ACT 1984 - SECT 27AA Meaning of relevant failure

INSURANCE CONTRACTS ACT 1984 - SECT 27AA

  (1)   In this Act, a relevant failure in relation to a contract of insurance is:

  (a)   if the contract is, or would be, a consumer insurance contract--a misrepresentation made by the insured in breach of the duty to take reasonable care not to make a misrepresentation; or

  (b)   otherwise:

  (i)   a failure by the insured to comply with the duty of disclosure; or

  (ii)   a misrepresentation made by the insured to the insurer before the contract was entered into.

  (2)   Without limiting subsection   (1), if, in relation to a contract of life insurance under which a person other than the insured would become a life insured:

  (a)   the life insured made a misrepresentation during the negotiations for the contract but before it was entered into; and

  (b)   the misrepresentation would have been a breach of the duty to take reasonable care not to make a misrepresentation if that duty had applied to the life insured in relation to the contract;

then the misrepresentation is a relevant failure in relation to the contract (whether or not the contract is a consumer insurance contract).