Financial Sector Reform (Hayne Royal Commission Response) Act 2020 (135 of 2020)

Schedule 6   Use of terms "insurance" and "insurer"

Insurance Act 1973

5   Before section 115

Insert in Part X:

114 Use of words "insurance" and "insurer"

Use of the word "insurance"

(1) A person commits an offence if:

(a) the person carries on a business or is proposing to carry on a business; and

(b) the person uses the word insurance to describe (expressly or by implication) a product or service that the person supplies, or proposes to supply, in the course of carrying on the business; and

(c) the product or service is not insurance; and

(d) it is likely in all the circumstances (including the use of the word insurance ) that the product or service could be mistakenly believed to be insurance.

Penalty:

(a) in the case of an individual - 50 penalty units; or

(b) in the case of a body corporate - 500 penalty units.

Use of the word "insurer"

(2) A person commits an offence if:

(a) the person carries on a business or is proposing to carry on a business; and

(b) the person uses the word insurer to describe (expressly or by implication) the person in connection with a product or service that the person supplies, or proposes to supply, in the course of carrying on the business; and

(c) either:

(i) the product or service is not insurance; or

(ii) the person would breach a requirement mentioned in subsection (3) if the person supplied the product or service in the course of carrying on the business; and

(d) in a case where the product or service is not insurance - it is likely in all the circumstances (including the use of the word insurer ) that the product or service could be mistakenly believed to be insurance.

Penalty:

(a) in the case of an individual - 50 penalty units; or

(b) in the case of a body corporate - 500 penalty units.

(3) For the purposes of subparagraph (2)(c)(ii), the requirements are the requirements imposed by the following provisions:

(a) section 9 or 10 of this Act (need to be authorised to carry on insurance business);

(b) section 17 of the Life Insurance Act 1995 (registration of life companies);

(c) section 10 of the Private Health Insurance (Prudential Supervision) Act 2015 (carrying on health insurance business without registration).

Exceptions

(4) Subsections (1) and (2) do not apply if:

(a) the person is a government entity; or

(b) the person:

(i) is covered by a determination under subsection (6); and

(ii) if that determination is subject to conditions - meets those conditions; or

(c) the product or service is of a kind prescribed by the regulations; or

(d) the product or service is State insurance (within the meaning of paragraph 51(xiv) of the Constitution) not extending beyond the limits of the State concerned.

Note: The defendant bears an evidential burden in relation to the matters in subsection (4). See subsection 13.3(3) of the Criminal Code.

(5) A government entity is:

(a) a Department of State of the Commonwealth; or

(b) a Department of the Parliament established under the Parliamentary Service Act 1999; or

(c) an Executive Agency, or Statutory Agency, within the meaning of the Public Service Act 1999; or

(d) a Department of State of a State or Territory; or

(e) an entity that is established for a public purpose by a law of the Commonwealth, a State or a Territory.

Determinations by ASIC

(6) ASIC may, by legislative instrument determine that subsections (1) and (2) do not apply to a specified person or class of persons. The determination may be subject to conditions.

(7) ASIC must not:

(a) revoke a determination under subsection (6) relating to a specified person; or

(b) vary such a determination by varying or including conditions to which the determination is subject;

unless ASIC has notified the person in writing that it is considering revoking or varying the determination.

Strict liability

(8) Subsections (1) and (2) are offences of strict liability.