Bill Shorten (Maribyrnong, Australian Labor Party, Minister for Financial Services and Superannuation) Share this | Link to this | Hansard source

by leave—I present a supplementary memorandum to the bill. I move government amendments (1) to (6) as circulated:

(1)   Schedule 1, page 3 (after line 3), before item 1, insert:

1A Paragraph 11(10)(a)

  After "37", insert ", 37C".

1B Paragraph 11(10)(c)

  After "37", insert ", 37C".

(2) Schedule 1, item 1, page 4 (line 27), omit "The prescribed contract is taken", substitute "The flood provisions of the prescribed contract are taken".

(3) Schedule 1, item 1, page 5 (lines 3 and 4), omit "the prescribed contract is taken", substitute "those provisions are taken".

(4) Schedule 1, item 1, page 5 (lines 7 and 8), omit "the contract", substitute "those provisions".

(5) Schedule 1, item 1, page 5 (after line 15), after subsection 37D(5), insert:

  (5A) To avoid doubt, this section does not affect the operation of any provisions of a prescribed contract that are not flood provisions.

(6) Schedule 1, page 5 (after line 30), at the end of the Schedule, add:

2 Subsection 38(3)

  After "37", insert ", 37C".

Today I am moving amendments to the bill to ensure that the standard definition of 'flood' can operate as intended. The amendments respond to concerns raised by insurers in consultation with the House of Representatives Standing Committee on Economics, as outlined in the committee's Advisory report on the Insurance Contracts Amendment Bill2011 released on 17 February 2012. I note that the House Standing Committee on Economics recommended that the House of Representatives pass the bill.

Amendment (1) addresses concerns raised by insurers that they be required to provide information to insured people on their flood cover to satisfy the 'clearly inform' requirement every time a renewal, extension, variation or reinstatement of an insurance policy is made. These amendments will ensure that insurers will have only to provide information to the insured on their flood cover initially or before entering into an insurance policy, or at the first renewal after the amending legislation commences or any variation that changes the extent of flood cover. In addition, amendment (6) will ensure that insurers will not be required to provide information to the insurer to satisfy the 'clearly inform' requirement about whether an interim contract provides flood cover. This is consistent with the treatment that applies to interim contracts in respect of providing information on exclusions and limitations under the Insurance Contracts Act 1984.

Amendments (2) to (5) respond to concerns raised by insurers that the bill may prohibit any limitation on the operation of the standard definition of flood such as exclusions for specific items or high-risk properties such as seawalls, jetties and pontoons, or exclusion for flood damage within the first 72 hours of a policy being issued. The amendments will ensure that insurance policies that provide flood cover do not affect the terms and conditions that would otherwise be applicable to flood cover.

Question agreed to.

Bill, as amended, agreed to.

Ordered that this bill be reported to the House with amendments.