In an article in the November issue of the Journal of the Australian Insurance Institute reference is made to law reform in Australia being “somewhat akin to the unpredictable Melbourne weather: it is often a long time between showers but when it rains it certainly pours”.

The Commonwealth Parliament in 1984 passed two pieces of legislation of striking importance to the insurance industry. They are the Insurance Contracts Act and the Insurance (Agents and Brokers) Act. Neither Act is as yet, in its entirety, proclaimed. It is anticipated that there will be miscellaneous amendments to the legislation introduced into Parliament early in 1985. By mid-1985 the entire package of insurance legislation should be in force.

It would not be an exaggeration to describe the legislation, especially that relating to insurance contracts, as pathfinding legislation of world-wide significance. Some of the concepts codified in this national legislation are new. Basic concepts relating to the insurance contract have been varied somewhat. There is a strong swing, typical of much current legislation, to what are perceived to be consumer interests. It is beyond the scope and space of this note to comment at all profoundly about the legislation. Some points of particular importance can be made.

Legislation made by the Commonwealth Parliament in Australia must satisfy the constitutional constraints of the Federal system. There is a possibility that this insurance legislation may have created a constitutional difficulty that will have to be corrected. There can be no doubt that this law reform has created a more complex legal scene for the insurance industry. While lawyers who advise the industry may rejoice, those who provide, and, to a lesser extent, who acquire insurance services may not be so happy. This difficulty arises from the fact that in certain respects the legal regimes for the marine, non-marine and reinsurance markets will differ.

While the Insurance Contracts Act does apply across the board to non-marine insurance, including life insurance, it specifically excludes from its application contracts of reinsurance and contracts to or in relation to which the Marine Insurance Act 1909 applies. The legislation also provides that it is the intention of Parliament that the Act is not to affect the operation of any other law of the Commonwealth, the operation of the law of a State or Territory, or the operation or any principle or rule of the common law (including the law merchant) or of equity except in so far as the Act expressly or by necessary intendment otherwise provides.

The difficulty is best demonstrated by reference to the law of New South Wales with particular reference to provisions in recent New South Wales and Commonwealth legislation dealing with non-disclosure and misrepresentation. Part IV of the Commonwealth Insurance Contracts Act, headed “Disclosures and Misrepresentations” deals with the duty of disclosure, misrepresentations, remedies for