ASIC appeals court loss against Auto & General Insurance
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The news: The corporate regulator is appealing its Federal Court loss against Auto & General Insurance last month after it alleged the insurer's contents and house insurance policies included unclear or potentially misleading claims.
The numbers: In April 2023 the Australian Securities and Investments Commission (ASIC) sued Auto & General, alleging an unfair contract term appeared in seven home and contents insurance policies.
If ASIC is successful in its appeal, Auto & General Insurance could face financial penalties.
The context: ASIC has previously argued the term “tell us if anything changes while you’re insured with us” was unfair, and could mislead or confuse the customer. It has returned to this allegation in the appeal.
ASIC said it remained concerned the term imposed an unclear obligation on policyholders on what they needed to disclose.
It also alleged the policy suggested Auto & General had "a broader right to refuse claims or reduce the amount payable under claims if the policyholder does not meet the notification obligation than is otherwise available to Auto & General under the Insurance Contracts Act".
In January, Auto & General was also slapped with a $50 million capital requirement by the prudential regulator after it found that the company had an immature risk culture.
What they said: In handing down his judgement in March, Justice Ian Jackman said: “... the requirement in the notification clause to notify the defendant ‘if anything changes’ concerns the information already provided by the insured to the defendant".
“In my view, there is nothing in the purpose or the object of the transaction which would point away from that construction," he said.
The source: ASIC media release
