ASIC sues health giant’s life insurance company
ASIC sues health giant’s life insurance company | Insurance Business Australia
Insurance News
ASIC sues health giant’s life insurance company
Allegations of unfair contract terms
Insurance News
By
Daniel Wood
The Australian Securities and Investments Commission (ASIC) has launched a civil case against HCF Life Insurance Company Pty Limited (HCF Life). The regulator’s media release this morning said the Federal Court proceedings allege unfair contract terms in a range of insurance products that could mislead the public.
HCF Life is a wholly owned subsidiary of The Hospitals Contribution Fund (HCF), Australia’s largest not-for profit health fund.
According to the release, the case involves standard form contracts issued under HCF Life’s ‘Recover’ range of insurance products.
“Insurers need to ensure that all terms in their contracts, including important pre-existing condition terms, accurately communicate the rights of customers,” said ASIC deputy chair Sarah Court (pictured above). Court said the inclusion of allegedly unfair and misleading terms can deter customers from making a claim.
She also said one of ASIC’s Enforcement Priorities is taking action concerning unfair contract terms in insurance products.
In the HCF Life case, ASIC alleges that the ‘pre-existing condition’ term in the contracts is an unfair contract term and could mislead the public.
“The term purports to deny coverage if a customer did not disclose a pre-existing condition before entering the contract,” said the release.
The release also said “the term suggests that HCF Life can deny coverage even if the customer was not aware of the pre-existing condition.”
ASIC said it is is seeking declarations that the term is void and will also seek injunctions and corrective orders.
The regulator’s release said it is also pursuing a penalty “regarding the allegation that HCF Life’s contracts are liable to mislead the public.”
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