Business Law
Group Colleges Australia
1.What is the duty of disclosure?
Ans:The insurance company needs information from the consumers to decide whether make a contract or renew a contract with consumers. And also the insurance company wants to decide the price of the contract and terms and conditions of the contract on the basis of the information which is provided by the consumers. The law enforces a duty of disclosure on consumers when they are looking to take a new insurance cover or wants to renew the existing insurance cover. Insurance company may be able to reject to pay a claim or a part of claim if the policyholder has not compiled with their duty of disclosure. However, the insurance company must establish the following:
The insurance company noticeably inform the policyholder in writing about the duty of disclosure and the consequences of non-disclosure.
The policyholder knew that the insurance company required information about certain matters.
The policyholder fail to provide information or present the information in wrong way.\
The above mentioned elements discussed in detail as follow:
Insurance Company`s Responsibility: According to the Insurance Contracts Act under the section 22, before a contract of insurance is entered into, the insurance company must inform the consumer, in writing, of the general nature and effect of the duty of the disclosure, including the consequences of non-disclosure.
An insurance company who has no compiled with the section 22 of the Insurance Contracts Act may not exercise any rights in respect to non-disclosure unless the non-disclosure was fraudulent [S22 (3)].
Consumer`s Responsibility:
According to the Insurance Contracts Act under the section 21,a consumer is required to disclose all matters known to them that they know to be relevant to the
1.What is the duty of disclosure?
Ans:The insurance company needs information from the consumers to decide whether make a contract or renew a contract with consumers. And also the insurance company wants to decide the price of the contract and terms and conditions of the contract on the basis of the information which is provided by the consumers. The law enforces a duty of disclosure on consumers when they are looking to take a new insurance cover or wants to renew the existing insurance cover. Insurance company may be able to reject to pay a claim or a part of claim if the policyholder has not compiled with their duty of disclosure. However, the insurance company must establish the following:
The insurance company noticeably inform the policyholder in writing about the duty of disclosure and the consequences of non-disclosure.
The policyholder knew that the insurance company required information about certain matters.
The policyholder fail to provide information or present the information in wrong way.\
The above mentioned elements discussed in detail as follow:
Insurance Company`s Responsibility: According to the Insurance Contracts Act under the section 22, before a contract of insurance is entered into, the insurance company must inform the consumer, in writing, of the general nature and effect of the duty of the disclosure, including the consequences of non-disclosure.
An insurance company who has no compiled with the section 22 of the Insurance Contracts Act may not exercise any rights in respect to non-disclosure unless the non-disclosure was fraudulent [S22 (3)].
Consumer`s Responsibility:
According to the Insurance Contracts Act under the section 21,a consumer is required to disclose all matters known to them that they know to be relevant to the