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Insurance contracts - Treasury submission to the Law Reform Commission

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The Treasury released today copies of a submission it has made

to the Law Reform Commission concerning its Insurance Contracts

Reference. The submission presents Treasury’s preliminary

reactions to tentative proposals set down in a Discussion Paper

on Insurance Contracts issued by the Commission in October 1978.

The purpose of that Paper was to promote public discussion and

comment on the proposals to assist the Commission in reaching

its conclusions and in drafting its final report.

Although the Treasury submission has been presented with the

approval of the'Treasurer, the views expressed are departmental

ones only and in no way commit the Treasurer or the Government.

The purpose of the Treasury submission, like the Commission's

Discussion Paper, is to help stimulate discussion of the issues.

The Law Reform Commission's Discussion Paper raised many issues.

The main question raised in the Treasury submission is whether

what the Commission has tentatively proposed would go too far

in the direction of restricting the activities of the insurance

industry and imposing additional controls on that industry.

The submission makes the point that the answer to that question

depends, in part, on the perspective from which analysis is


made and on broad social policy attitudes which, in the end,

are matters for governments and parliaments to decide.

The submission notes that a substantial number of the Commission's

tentative proposals would have the effect of restricting the

range and type of contracts which can be entered into by

insurers and their customers, or of controlling the way in which

contracts may be entered into. A number of the proposals would

also give additional powers of supervision to government


The submission suggests that, while the Commission has without

doubt identified many imperfections in insurance markets and

arrangements as they currently operate in Australia, it would be

desirable, in order to avoid unnecessary legislation in this area,

for further consideration to be given to possible alternative

approaches, including greater reliance on competitive market

forces and the scope for voluntary self-regulation by the industry


Copies.of the submission may be purchased from Australian

Government Publishing Service Bookshops in capital cities or

through its Mail Order Sales, AGPS, PO Box 84, Canberra, ACT, 2600.

The Treasury Canberra ACT 31 Aug 1979 .