Home / Regulatory & Government / NIBA urges brokers to prepare for UCT reforms
25 May 2020
The National Insurance Brokers Association (NIBA) plans to step up its preparations for the new unfair contract terms (UCT) regime that will commence next April.
NIBA CEO Dallas Booth says more information about the changes and how they will affect the industry will be provided. He has already urged brokers to seek legal advice on the new laws and their application to new insurance contracts.
UCT laws will apply to insurance contracts on April 5 as planned following the passage of the Financial Sector Reform Bill in Federal Parliament last year. The Federal Government’s recent decision to defer implementation of a number of Hayne royal commission reforms does not extend to the UCT changes.
“It’s something that brokers are going to have to come to grips with and to learn about,” Mr Booth says in a video to members last week. “It’s a fairly technical legal issue and I do recommend you talk to your preferred legal provider to get an assessment as to whether any broker wordings would be particularly liable to challenge.
“It will be particularly important if your firm has its own wordings, particularly for domestic insurance, for retail customers.
“You are going to have to review your policies to see whether any of those clauses, any provisions in the contract would be regarded as unfair.”
The move to ban unfair terms in insurance contracts flows from a recommendation by the Hayne royal commission in its final report to the Government.
A Melbourne-based broker says he has not been able to prepare for the looming changes because of the disruption caused by the coronavirus pandemic. A lot of his time has been spent helping his clients, who have mostly been affected by the revised clauses in Landlord policies.
“I will get to [the UCT reforms] but I haven’t started yet,” the broker told insuranceNEWS.com.au. “It has been pushed to one side. The COVID-19 thing is a daily issue. There has been lot of time taken up with that."