Australian insurance law

From Wikipedia, the free encyclopedia
Jump to: navigation, search

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.


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.[1]

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.


The Australian Prudential Regulation Authority (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.[2]

Insurance contract[edit]

The formation of an insurance contract is governed by ordinary contractual principles[3] however, as a commercial contract, a policy of insurance should be given a businesslike interpretation "having regard to the language used by the parties, the commercial circumstances the document addresses, and the objects which it is intended to secure."[4]

Code of Practice[edit]

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).[5]

Financial Ombudsman Service[edit]

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.

See also[edit]


  1. ^ s 2A.
  2. ^ Insurance Contracts Act section 11A.
  3. ^ Halsbury's Laws of England, 4th ed, vol. 25 (2003 reissue), [70].
  4. ^ Horsell International Pty Ltd v Divetwo Pty Ltd [2013] NSWCA 368.
  5. ^ According to ASIC Regulatory Guide 183, ASIC's approval does no more than inform consumers that they can have confidence in the Code of Practice.

External links[edit]

Further reading[edit]

  • 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).