NSW Legislation HELP - Does section 69 read with Section 11 Interpretations -

[John S]

Does section 69 of the insurance contracts act apply to a "varied" contract as defined under "Writing" of section 11 Interpretations?

Is it interpreted in the way that if an insurer makes a variation to a life insurance contract, they are required to provide this in writing to the insured within 14 days?

and if the insurer did not do this, the rights of a person other than the insurer in respect of a loss that occurred after the contract was entered into but before the information was given are the same as though the information had not been given?

Is this basically saying if an insurer did not send information confirming changes made to ones insurance cover, within 14 days of the change, its like the change never happen?

I've summarised the relevant sections of the act. Any help would be appreciated - thank you in advance


INSURANCE CONTRACTS ACT 1984 - SECT 69
Giving of information to insuredsthis Act, information in relation to a contract of insurance is to be or may be given in writing to a person before the contract is entered into; and

writing but it is reasonably practicable for it to be so given orally;

writing within 14 days after the day on which the contract was entered into.

subsection (1), be informed orally of the matters referred to in subsection 22(1); and

this Act:

writing to a person before the contract is entered into; and

writing;

writing within 14 days after the day on which the contract was entered into.The rights of a person other than the insurer in respect of a loss that occurred after the contract was entered into but before the information was given are the same as though the information had not been given.

subsection (1) or (2) is given in writing after the contract was entered into, but at a time later than 14 days after the day on which the contract was entered into:

writing before the contract was entered into.

this Act, information in relation to a contract of insurance is to be or may be given in writing by the insurer to a person before, or at the time when, the contract is entered into;

writing at a later time;

th

SECT 11
Interpretation

"writing" means writing in the English language or in another language agreed between the insurer and the insured.this Act, an interim contract of insurance is a contract of insurance that is intended by the insurer:

this Act:

contract of life insurance that is being maintained for the purposes of a superannuation or retirement scheme, where the insured is a trustee for the purposes of the scheme; and

paragraph (a) under which there can be one life insured only.

this Act, a contract of general insurance is a contract of insurance that is not a contract of life insurance.

this Act, a contract of liability insurance is a contract of general insurance that provides insurance cover in respect of the insured's liability for loss or damage caused to a person who is not the insured.

this Act, an instalment contract of general insurance is a contract of general insurance the premium for which is, by virtue of a provision of the contract, payable by 7 or more instalments in a year.

subsection (10), a reference in this Act to the entering into of a contract of insurance includes a reference to:

contract of life insurance--the making of an agreement by the parties to the contract to extend or vary the contract;

subsection (9):

paragraph (c), where, after the commencement of this Act and at or before the original entering into, or the renewal, extension or reinstatement, of a contract of insurance, the insurer has given information to the insured as required by section 22, 35, 37, 37C, 40, 44, 49 or 68, the requirement by that section to give information to the insured shall be deemed to be satisfied at or before any subsequent renewal, extension or reinstatement of the contract;

subsection (10A) applies to the variation; and

subsection applies to a variation of a contract of insurance if:

involved in a renewal, extension or reinstatement of the contract; or

contract of life insurance--will increase a sum insured under the contract in respect of one or more of the life insureds; and

this Act requires anything to be done before a particular contract is entered into, it is sufficient compliance with that provision if that thing is done at the time when the contract is entered into.

 

[Rob Legat - SBPL]

Section 69 doesn't have anything to do with variations to contracts. The section basically provides that where information is to be given to an insured person in writing - but it is not practical to do so at the time it needs to be given - then it can be given verbally and then provided in writing within 14 days.

 

[John S]

Section 69 doesn't have anything to do with variations to contracts. The section basically provides that where information is to be given to an insured person in writing - but it is not practical to do so at the time it needs to be given - then it can be given verbally and then provided in writing within 14 days.

Thanks for your reply. Ok so even though the below interpretation under section 11, which defines, entering a contract of life insurance which includes "variation"? Your saying that this is not read in conjuciton and apply to section 69 when reference has been made to contract entered into?

(4) For the purposes of this Act:
(a) a superannuation contract is a contract of life insurance that is being maintained for the
purposes of a superannuation or retirement scheme, where the insured is a trustee for the
purposes of the scheme; and

(9) Subject to subsection (10), a reference in this Act to the entering into of a contract of
insurance includes a reference to:
(a) in the case of a contract of life insurance--the making of an agreement by the parties to
the contract to extend or vary the contract;
(b) in the case of any other contract of insurance--the making of an agreement by the parties
to the contract to renew, extend or vary the contract; or
(c) the reinstatement of any previous contract of insurance.

Section 69
(3) Where information as mentioned in subsection (1) or (2) is given in writing after the contract
was entered into, but at a time later than 14 days after the day on which the contract was entered into:
(a) the rights of a person other than the insurer in respect of a loss that occurred during the
period commencing at the expiration of 14 days after the day on which the contract was entered into and
ending at the time when the information was so given are the same as though the information had not been
given; and

 

[Rob Legat - SBPL]

I got a little confused by the way you presented your first post - thanks for the clarification. Be careful when 'chopping up' the wording of Acts, particularly the Insurance Contracts Act as it is especially technical.

I think I know what you're looking at now. Variations are, for practical purposes here, treated like a new contract being entered into. The effect of section 69 is that the insurer can give verbal information, but needs to back it up by sending it in writing within 14 days.

If the information is given in writing later than 14 days, then :
- For the period from the end of the 14 days until the information is provided, the insured's rights are the same as if the information had not been given; and
- For the 14 day period, and any time from when the information is given in writing, the insured's rights are the same as if the information was properly given before the variation was made.

So, in a practical example:

If you make a contract variation on 1 October 2019, but the information is not given in writing but is given verbally. The insurer then provides it in writing on 25 October (i.e. outside the 14 days). Then the insured's rights are:

- For the period 1/10/19 to 15/10/19 - as if the information had been given in writing on 1/10/19;
- For the period 16/10/19 to 24/10/19 - as if the information had not been given at all; and
- For the period from 25/10/19 onward - as if the information had been given in writing on 1/10/19.

This doesn't necessarily mean the change didn't happen (but could be, for such areas as exceptions to coverage ) - but rather that the insurer didn't give the relevant information. This can have varying effects depending on the circumstances in question.

 

[John S]

Thanks for clarifying that, much appreciated. Sorry i do not hold any legal qualifications and find it difficult to express what i am trying to ask and not familiar with this act.

If you wouldn't mind clarifying further, the question at hand is:

If a person injured themselves on 22/10/2019 and this is the date they have been medically certified as totally disabled and totally and permanently disabled. Given that the date of disablement falls between the period 16/10/19 to 24/10/19 and the person did not get any verbal or written notification from 1/10/2019 and until after the date of disablement, would it be deemed as though if the information had not been given at all; and?

Further, the insurer then provides a notice on 26/10/2019 of the variation and (reduced sum insured). Would section 69 still apply considering the date of injury and disablement was within the 16/10/2019 - 24/10/2019 window and so it is as if the information had not been given at all?

Hope the above makes sense.

 

[John S]

I got a little confused by the way you presented your first post - thanks for the clarification. Be careful when 'chopping up' the wording of Acts, particularly the Insurance Contracts Act as it is especially technical.

I think I know what you're looking at now. Variations are, for practical purposes here, treated like a new contract being entered into. The effect of section 69 is that the insurer can give verbal information, but needs to back it up by sending it in writing within 14 days.

If the information is given in writing later than 14 days, then :
- For the period from the end of the 14 days until the information is provided, the insured's rights are the same as if the information had not been given; and
- For the 14 day period, and any time from when the information is given in writing, the insured's rights are the same as if the information was properly given before the variation was made.

So, in a practical example:

If you make a contract variation on 1 October 2019, but the information is not given in writing but is given verbally. The insurer then provides it in writing on 25 October (i.e. outside the 14 days). Then the insured's rights are:

- For the period 1/10/19 to 15/10/19 - as if the information had been given in writing on 1/10/19;
- For the period 16/10/19 to 24/10/19 - as if the information had not been given at all; and
- For the period from 25/10/19 onward - as if the information had been given in writing on 1/10/19.

This doesn't necessarily mean the change didn't happen (but could be, for such areas as exceptions to coverage ) - but rather that the insurer didn't give the relevant information. This can have varying effects depending on the circumstances in question.

UPDATE
Thanks for clarifying that, much appreciated. Sorry i do not hold any legal qualifications and find it difficult to express what i am trying to ask and not familiar with this act.

If you wouldn't mind clarifying further, the question at hand is:

Person filled in a form 31/9/19 - assumed it was to increase cover - insurer says to decrease.

Insurer did not provide any documentation to insured after lodgement of form. No verbal or written.

Person injured themselves on 22/10/2019 and this is the date they have been medically certified as totally disabled and totally and permanently disabled. Given that the date of disablement falls between the period 16/10/19 to 24/10/19 and the person did not get any verbal or written notification from 1/10/2019 and until after the date of disablement, would it be deemed as though if the information had not been given at all; and?

Further, the insurer then provides a notice on 26/10/2019 stating it confirmed the variation and (reduced sum insured) but this was an interim statement, did not say it reduced cover etc. Would section 69 still apply considering the date of injury and disablement was within the 16/10/2019 - 24/10/2019 window and so it is as if the information had not been given at all?

Hope the above makes sense.

 

[Rob Legat - SBPL]

I don't think this is a simple proposition. You'd need to work out what information was required to be given, and whether there was any change in that information which makes the non-disclosure relevant.

It's important to consider that there was an already existing policy. If the information which was required to be disclosed didn't change between the original policy and the varied policy, then the relevant information has already been disclosed (assuming proper disclosure was made in writing previously) and the lack of new disclosure likely won't make a difference.

It might also be considered that because the change came about from the person submitting a form to vary the policy, this isn't likely to fall under information that needs to be given - the person already knows what the variation is.

The situation would be different if it was a change initiated by the insurer.