In a rare move, ASIC has begun proceedings in the Federal Court against an insurer for alleged breaches of its duty of utmost good faith.<\/p>\n
A statement from ASIC says it has begun proceedings against Youi Pty Ltd (Youi) \u201c\u2026 for alleged breaches of the Insurance Contracts Act 1984, in relation to Youi\u2019s duty of utmost good faith in handling a building and contents insurance claim made by a policyholder\u201d.<\/p>\n
ASIC states the policyholder first made an insurance claim in January 2017 following a severe hailstorm in their home town of Broken Hill in November 2016.<\/p>\n
\u201cASIC alleges that Youi failed to meet the standard imposed by the duty in handling the claim as it took nearly two years to settle, with the repairs to the home finally being completed in November 2018.\u201d<\/p>\n
It says it is seeking declarations in relation to section 13 of the Insurance Contracts Act, which requires both parties to an insurance policy to act towards one another in respect of any matter arising under or in relation to the insurance contract with the utmost good faith<\/span><\/span>.<\/p>\n The regulator explains that “…at the time that this conduct took place, the Insurance Contracts Act did not impose any pecuniary penalties for a breach of the duty of utmost good faith, and so in these proceedings ASIC seeks declarations that Youi breached the duty”.<\/p>\n \u201cOn 13 March 2019, the law was changed so that for any conduct in breach of that duty after that date ASIC may also seek pecuniary penalties.\u201d<\/p>\n The regulator is also reminding the sector of draft legislation which, if passed, will include claims handling under the definition of financial services:<\/p>\n \u201cEarlier this year the Government also consulted on Exposure Draft legislation to regulate insurance claims handling as a financial service. If passed, these changes will enhance ASIC\u2019s ability to promote fair, transparent and timely claims handling.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":" In a rare move, ASIC has begun proceedings in the Federal Court against an insurer for alleged breaches of its duty of utmost good faith. A statement from ASIC says it has begun proceedings against Youi Pty Ltd (Youi) \u201c\u2026 for alleged breaches of the Insurance Contracts Act 1984, in relation to Youi\u2019s duty of […]<\/p>\n","protected":false},"author":24,"featured_media":49649,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8],"tags":[],"class_list":{"0":"post-49647","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-compliance-regulation"},"_links":{"self":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/49647","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/users\/24"}],"replies":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/comments?post=49647"}],"version-history":[{"count":0,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/49647\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media\/49649"}],"wp:attachment":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media?parent=49647"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/categories?post=49647"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/tags?post=49647"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}