Financial Services Royal Commission – Enhancing Consumer Protections and Strengthening Regulators: Recommendation 4.6 – Limiting Avoidance of Life Insurance Contracts
The submission to the Treasury in response to the exposure draft legislation released as part its consultation on the Financial Services Royal Commission – Enhancing Consumer Protections and Strengthening Regulators, was prepared by the Australian Consumer Law Committee of the Legal Practice Section.
The submission focuses on Recommendation 4.6 – Limiting avoidance of life insurance contracts.
The committee supports the amendments to the Insurance Contracts Act 1984 (Cth) as proposed in Schedule 1 of exposure draft of the Financial Sector Reform (Hayne Royal Commission Response - Protecting Consumers (2020 Measures)) Bill 2020: Avoidance of Life Insurance Contracts.
This amendment would implement Recommendation 4.6 of the Financial Services Royal Commission to return to the pre-2013 position, which ensures that insurers could only avoid a contract of life insurance where the insurer would not have entered into a contract of life insurance on any terms.