Auto & General cleared of ‘unfair’ term usage in policies
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The news: The Federal Court has found that Auto & General Insurance Company did not include an unfair contract term in its insurance contracts, following proceedings brought on by the corporate regulator.
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.
The context: ASIC had argued the term “tell us if anything changes while you’re insured with us” was unfair, and could mislead or confuse the customer.
Today, the Federal Court today cleared Auto & General of the allegations and said it was not unfair under the ASIC 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, 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.”
ASIC deputy chair Sarah Court said: “ASIC pursued this case as part of its consumer protection focus on unfair contract terms in insurance contracts.
“ASIC believes that contract terms, especially those in standard form contracts, should be proportionate, transparent and clear so that consumers can readily understand their rights and responsibilities under the contract.”
The source: ASIC
