{"id":73851,"date":"2024-10-29T08:23:52","date_gmt":"2024-10-28T22:23:52","guid":{"rendered":"https:\/\/riskinfo.com.au\/news\/?p=73851"},"modified":"2025-03-14T12:02:19","modified_gmt":"2025-03-14T01:02:19","slug":"hcf-life-contract-term-found-liable-to-mislead-public","status":"publish","type":"post","link":"https:\/\/riskinfo.com.au\/news\/2024\/10\/29\/hcf-life-contract-term-found-liable-to-mislead-public\/","title":{"rendered":"HCF Life Contract Term Found Liable to Mislead Public"},"content":{"rendered":"<div class=\"header row\">\n<div class=\"intro\">\n<h3><span data-olk-copy-source=\"MessageBody\">There was strong reader interest this week in our report that the Federal Court<\/span> has found that a \u2018pre-existing condition\u2019 term in a life company&#8217;s policies was liable to mislead the public&#8230;<\/h3>\n<\/div>\n<\/div>\n<p>The Federal Court has found that a \u2018pre-existing condition\u2019 term in certain <a href=\"https:\/\/www.hcf.com.au\/insurance\/life-recover-cover\" target=\"_blank\" rel=\"noopener\">HCF Life Insurance Company<\/a> policies was liable to mislead the public.<\/p>\n<p>A statement from ASIC says the term was used in three contracts issued under the direct insurer\u2019s \u2018Recover\u2019 range of products. ASIC alleged that the term could mislead the public because:<\/p>\n<ul>\n<li>It purported to allow HCF Life to deny coverage if a customer did not disclose a pre-existing condition before entering the contract, and a medical practitioner subsequently formed an opinion that signs or symptoms of the condition existed prior to the customer entering into the contract, even if a diagnosis had not been made<\/li>\n<li>It suggested that HCF Life could deny coverage even if the customer was not aware of the pre-existing condition when entering into the insurance contract and a reasonable person in the circumstances would not have been aware of the condition<\/li>\n<li>Section 47 of the Insurance Contacts Act prevents insurers from excluding coverage for non-disclosure of a pre-existing condition where the customer was unaware of the condition when taking out the insurance, and a reasonable person in the circumstances could not be expected to have been aware of the condition<\/li>\n<\/ul>\n<figure id=\"attachment_56950\" aria-describedby=\"caption-attachment-56950\" style=\"width: 152px\" class=\"wp-caption alignright\"><a href=\"https:\/\/riskinfo.com.au\/news\/files\/2021\/08\/Sarah-Court-e1627963164564.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\" wp-image-56950\" src=\"https:\/\/riskinfo.com.au\/news\/files\/2021\/08\/Sarah-Court-e1627963164564.jpg\" alt=\"\" width=\"152\" height=\"182\" \/><\/a><figcaption id=\"caption-attachment-56950\" class=\"wp-caption-text\">Sarah Court<\/figcaption><\/figure>\n<p>ASIC notes <strong>Justice Jackman<\/strong> said that the \u201c&#8230;ordinary and reasonable reader would be ignorant of the potential effect of s47 of the ICA, and nothing in the Recover Cover PDSs adverts to the possibility that it may preclude HCF Life from relying upon the Pre-Existing Condition Terms in particular circumstances.\u201d<\/p>\n<p>ASIC Deputy Chair <strong>Sarah Court<\/strong> says consumers &#8220;rightly expect&#8221; that insurers will provide accurate information to them about their rights.<\/p>\n<p>\u201cConsumers rely on this information to make insurance claims, often in trying personal circumstances. By including a term that was liable to mislead consumers and that purported to give HCF a broader right to deny coverage than was the case, HCF Life misled consumers about their rights.\u201d<\/p>\n<p>ASIC also alleged that the term was an unfair contract term under the Australian Securities and Investments Commission Act 2001, with Justice Jackman dismissing that part of its case.<\/p>\n<p>ASIC says it will consider the Court\u2019s decision and will seek penalties for misleading conduct. The matter will return to Court for case management on 8 November 2024.<\/p>\n<p>As background ASIC notes the relevant \u2018pre-existing condition\u2019 term appeared in product disclosure statements (in substantially identical terms) for the following insurance products issued by HCF Life under HCF Life\u2019s \u2018Recover\u2019 range of insurance products:<\/p>\n<ul>\n<li>Cash Back<\/li>\n<li>Smart Term<\/li>\n<li>Income Assist (replaced by Income Protect from October 2021)<\/li>\n<\/ul>\n<p>It says HCF Life replaced that \u2018pre-existing condition\u2019 term in its life insurance products on 9 November 2023.<\/p>\n<p><a href=\"https:\/\/download.asic.gov.au\/media\/oh1comoq\/24-237mr-asic-v-hcf-life-insurance-company-pty-limited-judgment-28-oct-2024.pdf\" target=\"_blank\" rel=\"noopener\">Click here<\/a> to read the full judgement.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>There was strong reader interest this week in our report that the Federal Court has found that a \u2018pre-existing condition\u2019 term in a life company&#8217;s policies was liable to mislead the public&#8230; The Federal Court has found that a \u2018pre-existing condition\u2019 term in certain HCF Life Insurance Company policies was liable to mislead the public. [&hellip;]<\/p>\n","protected":false},"author":24,"featured_media":73860,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[48,8,8291],"tags":[],"class_list":["post-73851","post","type-post","status-publish","format-standard","has-post-thumbnail","category-company-news","category-compliance-regulation","category-story-of-the-week"],"_links":{"self":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/73851","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=73851"}],"version-history":[{"count":0,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/73851\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media\/73860"}],"wp:attachment":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media?parent=73851"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/categories?post=73851"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/tags?post=73851"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}