Practical considerations of Insurance Contracts reform

May 2024

By Damian Lawrence, Principal Consultant and Virginia Douglas, Principal Consultant, Mosaic

The introduction of the Contracts of Insurance Bill dispels the myth that there is a lull in financial services reform, continuing the recent regulatory focus (including Financial Advice and CoFI) on protecting consumers.

Changes proposed in the Bill will modernise, clarify and simplify insurance law, and rebalance fundamental duties by putting more onus on the insurer.

At first view, the requirements born out of the CoFI regime, namely to treat consumers fairly, should put insurers in a strong starting position to deal with the proposed changes. But delve a little deeper and the response to the proposed changes will require careful consideration, particularly the impact on core processes and documents.

The Bill is currently in consultation so there is still a chance that certain aspects may change. However, if the Bill passes largely in its current form as planned at the end of 2024, then insurers will need to make wise use of the three-year transition period.

We have focused on four of the proposed changes the Bill brings and provide a view of some of the practical implications for these changes that insurers could consider when making a submission on the bill or in their long-term planning.

The deadline for submissions is 3 June 2024 and the Select Committee is due to report back in September. Please get in touch if you’d like to book a session with us to discuss these practical implications further.

Read our analysis on the Contracts of Insurance Bill