The appeal was launched in July of last year after the Federal Court finding that a term used in a range of products issued by HCF Life was not unfair.
On 12 May 2023, ASIC began civil proceedings against HCF Life, alleging that three types of insurance policies issued by HCF Life contained the unfair contract term and could mislead the public.
According to ASIC, substantially identical pre-existing conditions clauses were included across multiple insurance products offered under HCF Life’s Recover range, including Cash Back, Smart Term and Income Assist before the latter was replaced by Income Protect in October 2021.
Following this, HCF Life replaced the ‘pre-existing condition’ term in its life insurance products on 9 November 2023, which the regulator does not consider to be liable to mislead or to be unfair. In April of last year, after the liability decision was handed down, and in consultation with ASIC, HCF Life wrote to affected current and former policyholders, and published a corrective notice on its website.
“Those documents notified consumers of the liability judgment and directed them to contact HCF Life if they thought they were affected. The corrective notice remains on HCF Life’s website,” HCF Life said.
The saga continued on 8 May last year when the Federal Court penalised HCF Life $750,000 for including the pre-existing condition term in the above policies, which the court found was liable to mislead the public.
However, the part of the case where ASIC alleged that the term was an unfair contract term under the Australian Securities and Investments Commission Act 2001 was dismissed by the Court, leading to the current appeal.
ASIC appealed this aspect of the decision, arguing the court had placed undue weight on the protections afforded by section 47 of the Insurance Contracts Act when determining whether the term was unfair.
The regulator said it remained concerned that potentially unfair contract terms could effectively be “cured” by legislation that an ordinary and reasonable consumer would likely be unaware of.
ASIC also expressed concern that terms found to have misled consumers could nevertheless be deemed not unfair.
It is this appeal the Federal Court has rejected.
“Although the primary judge considered that the Pre-Existing Condition Terms were liable to mislead, his Honour held that they were not unfair for the purposes of s 12BG(1) of the ASIC Act,” the judgement read.
“We are in substantial agreement with the analysis of the primary judge and consider that ground to be without merit. We would therefore dismiss the appeal.”
At the time of writing, ASIC is considering the decision and has not indicated its intentions on another potential appeal.
This is what you get when advisers are declared liquidation funders
ASIC rightly challenged the PECs, and won, but ,”went back for its hat” as Justice Lee said
You can engage in such frolics when someone else funds your legal actions
The ASIC LEVY on advisers is BAD POLICY
another case of the judicary supportong the big end of town, their decissions wouldn’t pass the pub test the live in another uinverse
Yet another loss for ASIC. This is becoming embarrassing for them. It illustrates how trigger happy they are for the media headlines; yet the actual substance of their many claims, are dubious at best and just amount to a witch hunt, at worst.