While Parliament and the European Commission continue to ponder, at irregular intervals, the question of reforming insurance contract law, Australia has grasped the nettle. In 1984 they passed the Insurance Contracts Act and the Insurance (Agents and Brokers) Act, introducing what can only be described as quite staggering changes in their domestic insurance law. The changes are of fundamental importance in that they reverse many common law rules still much cherished in the law and practice of insurance in this country.

Professor Tarr’s book is therefore of considerable importance, being the first to explain these changes. The book is intended primarily for law students and for those taking insurance examinations but it will clearly be of use to legal practitioners in Australia and a useful focus for readers in jurisdictions still clinging to old common law principles.

The book is divided into 14 chapters which cover all the topics of general insurance, with only marine insurance enjoying a specialist chapter to itself. Two chapters have been contributed by specialist writers.

Some of the more major changes brought about by the Insurance Contracts Act 1984 can be illustrated. The narrow definition of insurable interest adopted in this country has been abandoned and the new Act “dispenses with the requirement that a contract of general insurance be underpinned by strict proprietary interest”. Although, as the author points out, as far back as 1945 the Life Assurance Act (Cth) had already expanded on the common law categories of insurable interest in lives, the 1984 legislation takes an even broader view. By concentrating on economic loss rather than on proprietary interest, the Act abolishes the rule current in this country based on Macaura v. Northern Assurance Co. Ltd. [1925] A.C. 619. However, as Tarr points out, the difficulties of assessing an insured’s economic interest will still present the courts with problems. The difficulties encountered by third party beneficiaries faced by the argument of lack of privity have also been overcome by giving them direct rights of enforcement.

Tarr points out that, while the new definition of insurable interest in the case of life insur