Retirement, Investments, and Insurance

Running head: INSURANCE
Insurance
Name of the Student
Name of the University
Author Note

INSURANCE1
Table of Contents
Section A.........................................................................................................................................2
Answer to Question 1(a)..............................................................................................................2
Answer to Question 1(b)..............................................................................................................3
Answer to Question 2...................................................................................................................3
Section B..........................................................................................................................................4
Question 1....................................................................................................................................4
Question 2....................................................................................................................................4
Question 3....................................................................................................................................6
Question 4....................................................................................................................................6
Section C..........................................................................................................................................7
Answer to Question 1(a)..............................................................................................................7
Answer to Question 1(b)..............................................................................................................8
Answer to Question 2...................................................................................................................8
Section D.........................................................................................................................................9
References......................................................................................................................................11

INSURANCE2
Section A
Answer to Question 1(a)
The three major legislations that were already implemented at the time of the global
financial crisis in Australia were the Insurance Act of 1973, Insurance Contracts Act of 1984 and
the Life Insurance Act 1995. The primary reason for establishing the Insurance Act of 1973 was
to protect the interests of the various policyholders and the potential policyholders in order to
create a viable, competent and consistently innovate the industry (Legislation.gov.au. 2020). The
main purpose of this law is to strengthen supervision of the prudential entities and protect
consumers more. The primary reason for establishing Insurance Contracts Act of 1984 is to
increase the information flow between the insurer and the people looking to be insured. The
objective behind this improved flow is to ensure that the insured make better choices without
taking unnecessary risks. It also intended to have a fair set of regulations which govern the
relations between the insuring entities and the insured consumers. Its section 21 dealt with the
duty disclosure to the insured in a manner which helped in minimising the losses of the people
signing an insurance contract. The Life Insurance Act 1995 is another act belonging to the same
category of insurance acts. The purpose of this act was to protect the interests of the owners and
the perspective owners by ensuring that they are able to conduct business in a viable manner
which was consistent with the development of the industry and the changes occurring in it
(Legislation.gov.au. 2020). This act can be considered as a successor to the Insurance Act 1945
in the sense that it intended to create some new regulations for the insurance companies
operating in Australia. It was also intended to bring about improvements in the prudential
supervision and protect the consumers more.

INSURANCE3
Answer to Question 1(b)
One of the events where the insurer should take up the opportunity of reminding the
client about the disclosure duty is while taking down the details of the consumers. If the insurer
thinks that the consumer is withholding any necessary basic information in the information, then
he should remind the insuring party about the importance of the disclosures. Another event
where the importance of duty of disclosure should be explained is at the time of explaining the
policies to the consumer (Cousy 2017). The aspect of fraud in an insurance contract and its
adverse effects should be clearly explained. This makes the client aware of the fact that
withholding information may result in future losses. The other event is at the time of explaining
the power of the insurer. They should also state that if there is any information withheld, then the
insurer may become powerless to help the client. In case of discovering ant misinformation or
fraudulent disclosure on the part of the client before signing a contract, the same should be
mentioned to the client and they should explained about the consequences of ignoring duty of
disclosure.
Answer to Question 2
The four important components which play an important function in upholding and
directly accurate behaviour of advisers are unconscionable conduct, duty of care, conflict of
interest and disclosure. One of the Components which is unconscionable conduct is to treat a
person unfairly on the basis of community and other disadvantages suffered by them. Section
991A of the act prohibits this (Legislation.gov.au. 2020). This ensures that the entities behave in
a fair manner and not ignore any clients. The duty of care ensures that the policies and details are
designed in a careful manner by keeping the interests of the clients in mind. They ensure that the
consumers receive sufficient benefits by signing an insurance contract. The conflict of interest