The extent of the insured’s duty of disclosure: a ...

The extent of the insured's duty of disclosure: a comparative analysis of the disclosure obligations of insured

in Australia, Singapore and China

Wei Song LLB

Lawyer NSW, NT

Faculty of Law Queensland University of Technology

2012

KEYWORDS Acts, Dispute, Common Law, Claims, Court, Duty of Disclosure, Fraud, General Insurance, Jurisdiction, Judges, Insurance Policy, Insurance Contracts, Insurer, Insured, Law Reform Commission, Legislation, Life Insurance, Non-disclosure, Misrepresentation, Misleading, Obligations, Regulators, Utmost Good Faith, Australia, Singapore, People's Republic of China, Hong Kong.

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ABSTRACT Pre-contractual material disclosure and representation from an insurance policy proposer is the most important element for insurers to make a decision on whether a proposer is insurable and what are the terms and conditions if the proposal by the proposer is able to be insured. The issue this thesis researches and investigates focus on the issues related to the pre-contractual non-disclosures and misrepresentations of an insured under the principle of utmost good faith, by operation of laws, can achieve with different results in different jurisdiction. A similar disputed claim involving material nondisclosed personal information or misrepresentation at the pre-contractual stage from an insured with respect to both general and life insurance policies settled by an insurer in Australia could be that the policy is set aside ab initio by the insurers in Singapore or China. The jurisdictions this thesis examines are

? Australia; ? Singapore; and ? China including Hong Kong.

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TABLE OF CONTENTS

KEYWORDS

ii

ABSTRACT

iii

LIST OF STATUTES

vii

ABBREVIATIONS

ix

DECLARATION

x

1 INTRODUCTION

1

2 INSURANCE LAW OF AUSTRALIA

6

2.1 The Sources of Insurance Law in Australia

6

2.2 Contract of Insurance at Common Law

9

2.3 Duty of Utmost Good Faith at Common Law

11

2.4 Duty of Utmost Good Faith under the ICA

15

2.5 Duty of Disclosure and Misrepresentation at Common Law 16

2.6 Duty of Disclosure under the ICA

23

2.7 Misrepresentation under the ICA

29

2.8 The Insurer's Duty of Notification under the ICA

32

2.9 Remedies for Non-Disclosure and Misrepresentation

under the ICA

34

2.10 Section 56 of the ICA

39

2.11 The Duty of Utmost Good Faith and its application to a

Third Party

41

2.12 Reinsurance

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2.13 Conclusions

45

3 GOVERNMENT REVIEW OF THE ICA

47

3.1 The Insurance Contracts Amendment Bill 2010

49

3.2 Utmost Good Faith under the Insurance Contracts Amendment

Bill 2010

50

3.3 Disclosure and Misrepresentations under the Insurance

Contracts Amendment Bill 2010

51

3.4 Notice to an Insured of Duty of Disclosure under the Insurance

Contracts Amendment Bill 2010

53

3.5 Proposed reforms to the Remedies for Non-disclosure and 54 Misrepresentation under the Insurance Contracts Amendment Bill 2010

3.6 Conclusions

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4 SINGAPORE INSURANCE LAW 4.1 The Insurance Law of Singapore 4.2 Legal Requirement for an Insurance Contract under Singapore Law 4.3 Duty of Disclosure under the Principle of the Utmost Good Faith 4.4 Insurers' Duty of Notification 4.5 Insured's Duty of Disclosure 4.6 How Singapore Courts Apply the Principle of Duty of Disclosure to Claims

55 55

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56 59 61

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