Fraudulent insurance claims : recent legal developments

Insurance fraud continues to be a major problem worldwide. This article will canvass recent legal developments in relation to selected issues and matters of particular concern to the insurance industry. This article is confined to fraudulent claims. Fraud may arise at various points in the insurance relationship, including initial fraud on placement and fraudulent breach of contract by the assured. Fraud at the outset by the assured is treated differently from innocent or negligent conduct. "Fraud" in the context of this paper embraces all claims where an insured intednds to deceive an insurer by getting out i money to which the insured knew he had no right. This article will examine fraudulent insurance claims.

Respecting contractual intentions : balancing consumer expectations with the sanctity of contract in the context of standard form insurance contracts

It is the purpose of this article to examine the means curently available to judges to achieve a workable balance between providing appropriate consumer protection to signatories of standard form contractors while still retaining adequate respect for the sanctity of contract, and, based on this analysis, to determine whether a significantly greater scope of contract (re)construction is likely to become the norm in most common law jurisdictions in the coming decades.

Disclosure in insurance law : contemporary and historical economic considerations

This article examines the importance of accurate classification and identification of risk with particular reference to the problem of adverse selection. It is argued that, historically, this concern was the paramount consideration influencing standard form contract formation and disclosure laws. The scope of its relevance today however is less apparent in that contemporary insurance contracting is conducted in a vastly different environment from that which prevailed at the time Lloyd's was better known as a coffee house. Accordingly, the second part of this article looks at the contemporary framework of information disclosure and those dynamics within it designed to elicit information weighing on risk forecasting : specifically, (a) direct inquiry and testing requirements; (b) signaling - or incentive based structuring of insurance contractual and (c) bargaining in the shadow of the utmost good faith doctrine. Finally, certain conclusions arising out of contemporary and historical economic considerations underpinning disclosure in insurance law are outlined.

Utmost good faith in insurance : reform overdue?

Considerable attention has been devoted to the duty or doctrine of utmost good faith in the academic literature and in the courts. This attention ranges from an analysis of the precise legal basis for the duty through a consideration of the continuing nature of that duty in the post-contract environment.It is quite clear that all contracts of insurance are subject to this duty of utmost good faith. What is less clear and certain are the incidents attendant upon such a duty and the scope of the obligations that such a duty imposes. This article examines the relative positions that have been reached in England and Australia and concludes with some recommendations for legislative reform to this area of the law.

Regulatory approaches to genetic testing in insurance

Rapid advancements in the field of genetic science have engendered considerable debate, speculation, misinformation and legislative action worldwide. While programs such as the Human Genome Project bring the prospect of seemingly miraculous medical advancements within imminent reach, they also create the potential for significant invasions of traditional areas of privacy and human dignity through laying the potential foundation for new forms of discrimination in insurance, employment and immigration regulation. The insurance industry, which has of course, traditionally been premised on discrimination as part of its underwriting process, is proving to be the frontline of this regulatory battle with extensive legislation, guidelines and debate marking its progress.

Disclosure under the prescribed insurance contracts regime : Section 35 of the Insurance Contracts Act 1984 and consumer protection revisited

Section 35 of the Insurance Contracts Act 1984 requires insurers offering insurance policies in six prescribed areas "to clearly inform" prospective insureds of any departure their policies may constitute from the standard covers established by the Act and its accompanying Regulations. This prescribed insurance contracts regime was designed to remedy comprehension problems generated by the length and complexity of insurance documents and to alleviate misunderstanding over the terms and conditions of individual policies. This article examines the rationale underpinning s 35 and the prescribed insurance contracts regime and looks at the operation of the legislation with particular reference to home contents insurance in Australia. It is argued that the means whereby disclosure of derogation from standard cover may be effected largely negates the thrust of the prescribed insurance contract reform. Recommendations to address these operational deficiencies are made.

The insured's non-disclosure in the formation of insurance contracts : a comparative perspective

The requirements that an insured disclose all facts material to a transaction as well as not misrepresent material facts in the formation of an insurance contract are universal requirements of insurance law. The nature and extent of these obligations varies from one jurisdiction to the next. Disclosure in the insurance context is distinct from the general approach in commercial contracts, and in others between persons dealing at arm's length. It is the purpose of this article therefore to examine, on a comparative basis, the approaches adopted in the Anglo-Commonwealth context of England, Australia New Zealand and Singapore to the resolution of disclose issues in the formation of insurance contracts. Particular attention is focused on the Insurance Contracts Act 1984 (Australia) as this statue effects the most significant overhaul of the common law and the National Consumer Council in the United Kingdom has advocated that similar reforms be adopted.

Disclosure and concealment in consumer insurance contracts

This book provides an in-depth examination of the theoretical,legal, social and economic foundations to disclosure and concealment of information in relation to the formation of consumer insurance contracts. A comparative treatment of this issue is undertaken with particular attention given to the judicial and legislative approaches adopted in the United Kingdom, the United States of America, Australia and New Zealand.

Business Process Model Merging : An Approach to Business Process Consolidation

This paper addresses the problem of constructing consolidated business process models out of collections of process models that share common fragments. The paper considers the construction of unions of multiple models (called merged models) as well as intersections (called digests). Merged models are intended for analysts who wish to create a model that subsumes a collection of process models - typically representing variants of the same underlying process - with the aim of replacing the variants with the merged model. Digests, on the other hand, are intended for analysts who wish to identify the most recurring fragments across a collection of process models, so that they can focus their efforts on optimizing these fragments. The paper presents an algorithm for computing merged models and an algorithm for extracting digests from a merged model. The merging and digest extraction algorithms have been implemented and tested against collections of process models taken from multiple application domains. The tests show that the merging algorithm produces compact models and scales up to process models containing hundreds of nodes. Furthermore, a case study conducted in a large insurance company has demonstrated the usefulness of the merging and digest extraction operators in a practical setting.

Building a methodology for context-aware business processes: insights from an exploratory case study

This paper describes the findings derived from an exploratory case study into the business processes at a leading Australian insurance provider. The business processes are frequently subjected to changes and deviations due to contextual events such as weather, financial conditions and others. In this study, we examine how context impacts business processes and how resulting business process changes are enacted. From our analysis, we suggest a methodological framework to guide organisations in the complex challenge of linking changing contextual factors with internal process design.

The regulation of insurance intermediaries in the Australian financial services market

The insurance industry discharges a critical role in the Australian economy and is a significant part of the Australian financial services market. The industry relies upon intermediaries, the principal types being brokers and agents, to promote, arrange and distribute their products and services in the market. The pivotal role that they play in this context and sensitivities associated with the consumer oriented products, such as house and contents insurance, has ensured close regulatory attention. Of particular importance was the passage of the Insurance (Agents and Brokers) Act 1984 (Cth), a comprehensive attempt to address the responsibilities of intermediaries as well as particular problem areas associated with the handling of money. However, with the introduction of financial services and market reform early in the new millennium this insurance intermediary specific regulatory approach was abandoned in favour of a market-wide strategy; that is, market reform was based upon across-the-board licensing, disclosure, conduct and fairness standards, and all financial products and services are now regulated at a generic level under Ch 7 of the Corporations Act 2001 (Cth). This article briefly explores the categories of insurance intermediaries and the relevant distinctions between them but focuses mainly upon the regulatory context in which they operate. This context transcends a strictly legal framework as the regulatory body, the Australian Securities and Investments Commission (ASIC), has sought to inform and guide the market through Policy Statements and Regulatory Guides. The usefulness of these guides as an adjunct to the legislation in explaining the scope and operation of regulatory framework is examined. In addition, the article looks at the self-regulatory and dispute resolution practices in this area and their impact. In conclusion an assessment of this across-the-board regulatory regime is advanced.

Floods, earthquakes and insurance coverage : issues, problems and solutions

The recent floods in Queensland and elsewhere in Australia as well as the recent earthquakes in New Zealand have again given rise to very significant uninsured losses. This article looks at the issue of cover protection against catastrophes such as floods and earthquakes affecting home buildings and contents insurance and the standard cover provisions of the Insurance Contracts Act 1984 (Cth). It points also to the possibility of a national scheme to cover natural disasters including floods.

Incentivising private health insurance through the income tax regime : Capitalising on behavioural models

The Australian income tax regime is generally regarded as a mechanism by which the Federal Government raises revenue, with much of the revenue raised used to support public spending programs. A prime example of this type of spending program is health care. However, a government may also decide that the private sector should provide a greater share of the nation's health care. To achieve such a policy it can bring about change through positive regulation, or it can use the taxation regime, via tax expenditures, not to raise revenue but to steer or influence individuals in its desired direction. When used for this purpose, tax expenditures steer taxpayers towards or away from certain behaviour by either imposing costs on, or providing benefits to them. Within the context of the health sector, the Australian Federal Government deploys social steering via the tax system, with the Medicare Levy Surcharge and the 30 percent Private Health Insurance Rebate intended to steer taxpayer behaviour towards the Government’s policy goal of increasing the amount of health provision through the private sector. These steering mechanisms are complemented by the ‘Lifetime Health Cover Initiative’. This article, through the lens of behavioural economics, considers the ways in which these assorted mechanisms might have been expected to operate and whether they encourage individuals to purchase private health insurance.