Jason Clare (Blaxland, Australian Labor Party, Parliamentary Secretary for Employment) Share this | Hansard source

I thank the honourable members who have participated in this debate. The insurance market is a critical part of the financial services sector. Life insurance products offer financial security. General insurance enables people to engage in personal, business and community activities that they would otherwise be unable to without facing unacceptable risk. The government strives to improve availability and affordability of insurance cover for Australians. The global financial crisis has tested Australia’s insurers and the framework for prudential supervision. Our insurers have weathered a downturn in global equity markets; nevertheless, in line with international moves Australia is conducting further reviews of minimum capital requirements, corporate governance standards, prudential reporting frameworks, executive remuneration and the supervision of diversified groups, and will continue to strive to maintain world’s best practice in regulation of insurers. The Insurance Contracts Act, however, focuses not on the financial health of insurers but, rather, on the network of rights and obligations among insurers, policy holders and third parties. The bill is intended to update and improve the operation of the act while maintaining a fair balance between the parties. It is the result of a consultative process that was commenced some time ago. Many submissions during the policy development and legislative drafting process helped in refining the proposals to the point of converting them into this bill.

On behalf of the government, I would like to thank the stakeholders for their contributions at various stages. As noted in the second reading speech, an options paper was recently released dealing with the issue of unfair terms in insurance contracts. Several comprehensive submissions have now been received and arguments for and against various options have been made. The government is considering the matters raised and I expect that the way forward on that project will be announced in the coming weeks.

In conclusion, the changes in this bill form part of the government’s ongoing work to further improve the operation of Australia’s insurance market for the benefit of insurers, policy holders and, ultimately, the community as a whole. I commend the bill to the House.

Question agreed to.

Bill read a second time.

Ordered that this bill be reported to the House without amendment.

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