01 Aug Common Australian Life Insurance Laws
Innate popularity of life insurance in Australia based on the distinct laws of this country that offer enough scope for maximum benefit to policyholders and potential buyers. Such laws keenly regulate insurance industry of Australia for a systematic insurance planning. The government often manifests the expedients which can make insurance a tool for maximum benefit to policyholders. The specified laws and rules assure invested funds don’t go in the wrong hands.
Monitoring Through Law:
The insurance companies’ law under section 51 XIV and XX of the Australian Constitution strengthens the assurance through life insurance. Similarly the Insurance Act 1973 and Insurance Contracts Act 1984 are some of the crucial laws whose abiding has been made compulsory under the insurance legislation procedure of the country for all insurance companies operating under state and private insurer companies.
In fact Insurance Act 1973 has made it necessary for insurance companies to present minimum level of capital and solvency if they want to enter into insurance market in Australia. Take for example Chapter 7 of the Corporations Act 2001 which prescribes regulation under which insurer parties, agents or brokers are offered best opportunity to continue with it at prescribed roles provided they deal with parties willing to be insured under the law. This strict regulation is a mega tool to systematize life insurance in Australia. Some regulating authorities which play a key role in regulation include:
- Australian Prudential Regulation Authority (APRA) can freeze assets of an insurer party by using its veto power if the operation goes against prescribed benefit level or manipulations done
- Australian Securities and Investment Commission (ASIC) is an authority that inspects general administration that prove beneficial for parties concerned
In fact General Insurance Code of Practice is a self regulatory code. It has major role to play to keep insurers and insured in line with Australian insurance regulation for pursuant of 1101A of Corporations Act 2001 that keeps insurance sector financially viable.
The insurer’s Internal Dispute Resolution (IDR) process has been brought into practice for the financial growth and resolving disputes concerned. Today a good chunk of Australians go for term life insurance policies that cover life.
And, families get death benefit on the demise or terminal illness of such policyholders.