HCF Life contests ASIC case, “strongly stands by” products

HCF Life contests ASIC case, “strongly stands by” products | Insurance Business Australia

Insurance News

HCF Life contests ASIC case, “strongly stands by” products

Says this is “test case for the wider industry”

Insurance News

By
Daniel Wood

The Australian Securities and Investments Commission (ASIC) has announced a civil case against HCF Life Insurance Company (HCF Life) alleging unfair contract terms in a range of insurance products.

A spokesperson for HCF, Australia’s largest not-for profit health fund and the owner of HCF Life, has provided Insurance Business with a statement contesting the ASIC case.

“HCF Life believes these products comply with the new laws and strongly stands by them,” said the statement. “It will contest this case to the fullest extent and believes this to be a test case for the wider industry.”

The HCF statement also said “It is important to note this case relates to HCF Life Insurance only.”

The statement provided to IB said its life insurance subsidiary was notified today by the regulator that four of its products will be tested in the courts. This follows the introduction of new unfair contract term laws in 2021.

“Prior to this notification HCF Life has been participating in ASIC’s investigation into these products in good faith for over 12 months,” said the statement.

HCF said the case relates to the pre-existing condition term “which is commonplace across guaranteed acceptance insurance products.” The statement said this term provides the seller with “some level of protection from people falsely claiming when they have a known medical issue.”

The HCF statement also referred to the underinsurance challenges in Australia.

“HCF Life feels it is in the best interests of consumers to have direct access to affordable life insurance products such as those in question,” said the statement.

Last month, for the first time, ASIC alleged unfair insurance contract terms and started proceedings against Auto & General Insurance Company Limited (Auto & General).

The case involves standard form home and contents insurance contracts and appears in products issued by companies including Budget Direct, ING Home & Contents, Virgin Insurance and Qantas Insurance.