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This is a Bill, not an Act. For current law, see the Acts databases.
New South Wales
Home Building Amendment
(Insurance) Bill 2009
Contents
Page
1 Name of Act 2
2 Commencement 2
Schedule 1 Amendment of Home Building Act 1989 No 147 3
Schedule 2 Amendment of Home Building Regulation 2004 9
b2009-011-20.d13
New South Wales
Home Building Amendment
(Insurance) Bill 2009
No , 2009
A Bill for
An Act to amend the Home Building Act 1989 and the Home Building Regulation
2004 to make further provision for home warranty insurance.
Clause 1 Home Building Amendment (Insurance) Bill 2009
The Legislature of New South Wales enacts: 1
1 Name of Act 2
This Act is the Home Building Amendment (Insurance) Act 2009. 3
2 Commencement 4
This Act commences on the date of assent to this Act. 5
Page 2
Home Building Amendment (Insurance) Bill 2009
Amendment of Home Building Act 1989 No 147 Schedule 1
Schedule 1 Amendment of Home Building Act 1989 1
No 147 2
[1] Section 99 Requirements for insurance for residential building work 3
Omit section 99 (3)(5). Insert instead: 4
(3) A contract of insurance in relation to residential building work 5
required by section 92 must include provision that deems the 6
suspension of a contractor's licence under section 42A to 7
constitute the insolvency of the contractor for the purposes of the 8
application of the policy to any loss that is the subject of a 9
building claim order made against the contractor that remains 10
unsatisfied. 11
(4) The following provisions apply to a claim under a contract of 12
insurance that arises because of the operation of subsection (3) in 13
connection with a building claim order: 14
(a) the claim is limited to a loss that would have been covered 15
by the contract in the event of the contractor's insolvency, 16
(b) the amount of the claim need not be the same as the amount 17
of the building claim order (and in particular is not limited 18
by the amount of the building claim order), 19
(c) the building claim order does not limit any right of a 20
beneficiary to appeal against a decision of the insurer in 21
respect of a claim under the contract (and any such right of 22
appeal may be exercised as if the building claim order had 23
not been made), 24
(d) the building claim order does not limit any right of 25
recovery of the insurer against the contractor in respect of 26
the loss to which the claim relates (whether that right arises 27
pursuant to any rights of the beneficiary to which the 28
insurer is subrogated, or otherwise). 29
(5) For the purposes of the operation of a provision of a contract of 30
insurance referred to in subsection (3), a contractor's licence that 31
would have been suspended under section 42A were it not for the 32
fact that the licence expired, or was surrendered or cancelled, 33
before the suspension took effect is taken to have been suspended 34
under that section. 35
(6) In this section: 36
building claim order has the same meaning as in section 42A. 37
Page 3
Home Building Amendment (Insurance) Bill 2009
Schedule 1 Amendment of Home Building Act 1989 No 147
[2] Section 102 General requirements for insurance 1
Insert after section 102 (3): 2
(3A) A provision of a contract of insurance to the effect that the 3
amount of cover provided by the contract is the minimum amount 4
provided for from time to time by this Act or the regulations is to 5
be read as providing that the amount of cover provided is the 6
minimum amount provided for by this Act or the regulations at 7
the time the contract is entered into. 8
[3] Section 103BA 9
Insert after section 103B: 10
103BA Limitations on policy coverage--claims made and notified policy 11
(1) A contract of insurance provides insurance cover in respect of 12
loss only if: 13
(a) in the case of cover for loss arising from non-completion 14
of work--the loss becomes apparent and is notified to the 15
insurer within the period of insurance, or 16
(b) in any other case: 17
(i) the loss becomes apparent and is notified to the 18
insurer within the period of insurance, or 19
(ii) the loss becomes apparent during the last 6 months 20
of the period of insurance and is notified to the 21
insurer within 6 months after the loss becomes 22
apparent. 23
(2) A loss becomes apparent when a beneficiary under the contract 24
first becomes aware (or ought reasonably have become aware) of 25
the loss. 26
(3) In this section: 27
loss means loss indemnified by a contract of insurance. 28
period of insurance means the period for which a contract of 29
insurance provides cover. 30
[4] Section 103C Regulations 31
Omit section 103C (2) (a). Insert instead: 32
(a) limitations on and reductions in liability, 33
[5] Schedule 4 Savings and transitional provisions 34
Insert at the end of clause 2 (1): 35
Home Building Amendment (Insurance) Act 2009 36
Page 4
Home Building Amendment (Insurance) Bill 2009
Amendment of Home Building Act 1989 No 147 Schedule 1
[6] Schedule 4, clause 79 (3) 1
Omit the subclause. 2
[7] Schedule 4, Part 15 3
Insert after Part 14: 4
Part 15 Provisions consequent on Home Building 5
Amendment (Insurance) Act 2009 6
80 Definitions 7
In this Part: 8
amending Act means the Home Building Amendment 9
(Insurance) Act 2009. 10
contract of insurance means a contract of insurance entered into 11
for the purposes of Part 6 of this Act. 12
81 Insurance claims arising from suspension of contractor's licence 13
(1) Section 99 (3)(6) (as inserted by the amending Act) apply only 14
to a contract of insurance entered into on or after the 15
commencement of those provisions. 16
(2) An insurance contract that is entered into on or after the 17
commencement of those provisions using any existing stock of 18
insurance contract forms is deemed to include the provision 19
required to be included by section 99 (3) (as inserted by the 20
amending Act). 21
82 Minimum amount of cover 22
(1) Section 102 (3A) extends to: 23
(a) a contract of insurance entered into before the 24
commencement of that subsection (despite any provision 25
of the policy), and 26
(b) a claim under any such contract of insurance, and 27
(c) proceedings on such a claim (including proceedings 28
commenced but not finally determined before the 29
commencement of that subsection). 30
(2) Despite subclause (1), section 102 (3A) does not extend to or 31
otherwise affect: 32
(a) a claim that was paid in full before the commencement of 33
that subsection, or 34
Page 5
Home Building Amendment (Insurance) Bill 2009
Schedule 1 Amendment of Home Building Act 1989 No 147
(b) any agreement made before the commencement of that 1
subsection to settle a claim, or 2
(c) a decision of an insurer made before the commencement of 3
that subsection that cannot be the subject of appeal because 4
of clause 65 of the Home Building Regulation 2004, or 5
(d) the amount that a person is entitled to recover under a 6
contract of insurance where that amount was paid before 7
the commencement of that subsection under the indemnity 8
provided by Division 2 (Insurance claims indemnified by 9
State) of Part 6A of this Act, or 10
(e) any final determination of legal proceedings made by a 11
court or tribunal before the commencement of that 12
subsection. 13
(3) This clause applies only to contracts of insurance entered into on 14
or after 1 May 1997. 15
83 Application of amendments to existing insurance policies 16
(1) Section 103BA (Limitations on policy coverage--claims made 17
and notified policy) extends to: 18
(a) a contract of insurance entered into before the 19
commencement of that section (despite any provision of 20
the contract), and 21
(b) a claim under any such contract of insurance, and 22
(c) proceedings on such a claim (including proceedings 23
commenced but not finally determined before the 24
commencement of that section). 25
(2) Despite subclause (1), section 103BA does not extend to or 26
otherwise affect: 27
(a) a claim that was paid in full before the commencement of 28
that section, or 29
(b) any agreement made before the commencement of that 30
section to settle a claim, or 31
(c) a decision of an insurer made before the commencement of 32
that section that cannot be the subject of appeal because of 33
clause 65 of the Home Building Regulation 2004, or 34
(d) the amount that a person is entitled to recover under a 35
contract of insurance where that amount was paid before 36
the commencement of that section under the indemnity 37
provided by Division 2 (Insurance claims indemnified by 38
State) of Part 6A of this Act, or 39
Page 6
Home Building Amendment (Insurance) Bill 2009
Amendment of Home Building Act 1989 No 147 Schedule 1
(e) any final determination of legal proceedings made by a 1
court or tribunal before the commencement of that section. 2
(3) This clause applies only to contracts of insurance entered into on 3
or after 1 May 1997. 4
84 Proceedings finally determined 5
For the purposes of this Part, proceedings are not finally 6
determined if: 7
(a) any period for bringing an appeal as of right in respect of 8
the proceedings has not expired (ignoring any period that 9
may be available by way of extension of time to appeal), or 10
(b) any appeal in respect of the proceedings is pending 11
(whether or not it is an appeal brought as of right). 12
85 Reduction of liability for failure to enforce statutory warranty 13
Clause 58A of the Home Building Regulation 2004 (as inserted 14
by the amending Act) extends to a contract of insurance entered 15
into before the commencement of that clause, and for that 16
purpose every contract of insurance entered into before that 17
commencement is taken to include provision as referred to in that 18
clause. 19
86 Repeal of clause 63A of Regulation--period of grace for notifying 20
loss 21
(1) If clause 63A of the Regulation prevented a claim for loss from 22
being made during any part of the loss notification period for the 23
loss, there is to be a period of grace for notifying the loss. 24
(2) The period of grace starts on the repeal of clause 63A of the 25
Regulation and continues for a period that is equal in length to 26
that part of the loss notification period for which clause 63A of 27
the Regulation prevented the claim from being made. 28
(3) A loss notified to an insurer during the period of grace is deemed 29
to have been notified during the loss notification period for the 30
loss. 31
(4) If an insurer has refused a claim on the basis of clause 63A of the 32
Regulation: 33
(a) the insurer must notify the claimant of any period of grace 34
for notifying the loss to which the claim relates that results 35
from the operation of this clause, and 36
Page 7
Home Building Amendment (Insurance) Bill 2009
Schedule 1 Amendment of Home Building Act 1989 No 147
(b) the period of grace for notifying the loss concerned starts 1
(despite subclause (2)) when the claimant receives the 2
insurer's notification under paragraph (a) and continues 3
for the period provided for by subclause (2). 4
(5) The refusal of a claim for loss on the basis of clause 63A of the 5
Regulation (being a claim that would have been validly made had 6
clause 63A of the Regulation not been made): 7
(a) does not prevent the claimant from resubmitting the claim 8
or submitting the claim as a new claim (without the need 9
to appeal against the decision to refuse the claim), and 10
(b) does not prevent the insurer from proceeding to accept and 11
assess the refused claim as a claim now properly made. 12
(6) An insurer is not entitled to refuse or reduce liability on a claim 13
for loss on the grounds of a failure to notify the loss during the 14
loss notification period if the loss is notified during the period of 15
grace. 16
(7) The period of grace provided by this clause does not apply in a 17
case in which the loss notification period ended before the 18
commencement of clause 63A of the Regulation. 19
(8) In this clause: 20
loss notification period for a loss means the period within which 21
loss must be notified to the insurer under a contract of insurance 22
in order for the loss to be covered by the contract of insurance (as 23
provided by section 103BA). 24
Note. Section 103BA extends to existing contracts of insurance. 25
the Regulation means the Home Building Regulation 2004. 26
Page 8
Home Building Amendment (Insurance) Bill 2009
Amendment of Home Building Regulation 2004 Schedule 2
Schedule 2 Amendment of Home Building 1
Regulation 2004 2
[1] Clause 25 General requirements for obtaining certain authorities under 3
Act 4
Insert after clause 25 (1) (a) (ii): 5
(iii) is not a debtor under a judgment for money that has not 6
been satisfied where the judgment is for the payment of 7
money in relation to a building claim under Part 3A of the 8
Act or the payment of money to an insurer in relation to a 9
claim relating to home warranty insurance (within the 10
meaning of Part 6 of the Act), and 11
(iv) is not (and has not been within the period of 3 years before 12
the date of the application) a director of a corporation that 13
is a debtor under a judgment for money as referred to in 14
subparagraph (iii), and 15
(v) is not subject to any order of a court in relation to a 16
building claim under Part 3A of the Act that has not been 17
satisfied within the period required for satisfaction of the 18
order, and 19
[2] Clause 25 (3) 20
Omit the subclause. Insert instead: 21
(3) Subclause (1) (a) (v) or (vi) does not prevent the 22
Director-General from issuing an authority if the 23
Director-General is satisfied that the person: 24
(a) has complied with the order of the court or Tribunal after 25
the period required by the court or Tribunal, and 26
(b) has a reasonable excuse for the failure to comply with the 27
order within that period. 28
[3] Clause 39A General requirements for renewal or restoration of 29
authorities 30
Insert after clause 39A (1) (e): 31
(e1) is not subject to any order of a court in relation to a 32
building claim under Part 3A of the Act that has not been 33
satisfied within the period required for satisfaction of the 34
order, and 35
(e2) is not a debtor under a judgment for money that has not 36
been satisfied where the judgment is for the payment of 37
money in relation to a building claim under Part 3A of the 38
Page 9
Home Building Amendment (Insurance) Bill 2009
Schedule 2 Amendment of Home Building Regulation 2004
Act or the payment of money to an insurer in relation to a 1
claim pursuant to home warranty insurance (within the 2
meaning of Part 6 of the Act), and 3
(e3) is not (and has not been within the period of 3 years before 4
the date of the application) a director of a corporation that 5
is a debtor under a judgment for money as referred to in 6
paragraph (e2), and 7
[4] Clause 39A (4) 8
Omit the subclause. Insert instead: 9
(4) Subclause (1) (e) or (e1) does not prevent the Director-General 10
from renewing or restoring an authority if the Director-General is 11
satisfied that the person: 12
(a) has complied with the order of the court or Tribunal after 13
the period required by the court or Tribunal, and 14
(b) has a reasonable excuse for the failure to comply with the 15
order within that period. 16
[5] Clause 58A 17
Insert after clause 58: 18
58A Reduction of liability for failure to enforce statutory warranty 19
(1) An insurance contract may contain a provision to the effect that 20
the insurer may reduce its liability under the contract or reduce 21
any amount otherwise payable in respect of a claim because of a 22
failure by the beneficiary to take action to enforce a statutory 23
warranty from the breach of which the insured loss arises, but 24
only to the extent of an amount that fairly represents the extent to 25
which the insurer's interests were prejudiced as a result of the 26
failure. 27
(2) A provision included in an insurance contract under this clause 28
does not limit the operation of any provision included in the 29
insurance contract to the effect of a provision required to be 30
included by clause 63. 31
[6] Clause 63A Period within which insurance claim must be made 32
Omit the clause. 33
Page 10
Home Building Amendment (Insurance) Bill 2009
Amendment of Home Building Regulation 2004 Schedule 2
[7] Clause 73A Temporary exemption from section 93 (3) requirements 1
Omit the clause. 2
Page 11
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