Corporate Regulation
WHAT SHOULD BUSINESSES BE DOING IN 2019?
Recognising the unique features of insurance contracts, the government proposes to tailor the regime for insurance contracts as follows: –– the main subject matter exemption will extend narrowly to those terms that describe what is being insured under the policy; –– the upfront price payable exemption will cover terms related to the premium and excess payable under the policy; –– policies which provide the insured with options of cover will be considered Terms that focus on limits on liability and premium payment terms, may not be exempt from the UCT regime. Once the reforms are implemented, insurers will need to give close consideration to the policy terms that they are including in standard form contracts with consumers and small businesses. Particular areas of risk include excess payments, exclusions and defined terms that have uncommon meanings and there is likely to be an increased requirement to justify such provisions through actuarial data. standard form contracts; and –– terms which do not reflect the underwriting risk accepted by the insurer will be exposed to the UCT regime.
Businesses who deliver goods or services to consumers or small businesses must ensure they understand the growing importance of the ACL in the consumer law space. The review of the ACL in 2017 has already triggered a toughening of the ACL regime and the associated penalties. We expect the ACCC’s focus on the use of the ACL to continue and where appropriate, they will look to raise the profile of the ACL by running high profile cases. Following the Financial Services Royal Commission there is also a significant push to improve the legal protections for retail customers in the financial services space and the removal of various existing exceptions for insurers under the unfair contract terms regime is one such example. These initiatives will no doubt result in greater awareness amongst consumers as to their legal rights. Businesses must be cautious to avoid misrepresenting the scope and application of the ACL as this act in itself can also result in significant penalties.
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