State TPD decision to have national effects, lawyer says
A lawyer says a recent WA Supreme Court decision ruling that the proceeds of total and permanent disability (TPD) insurance policies are beyond the reach of creditors in bankruptcy will be felt in other state jurisdictions.
In Berryman v Zurich Australia  WASC 196, the court determined that the provisions in Australia’s Bankruptcy Act 1966 put TPD benefits beyond the reach of creditors in bankruptcy.
Shine Lawyers partner Alex Moriarty says the supreme courts in other states should pay attention to the decision.
“The Bankruptcy Act is national legislation and while the West Australian Supreme Court decision isn’t binding in other states, other state supreme courts are required to take serious note of it,” Mr Moriarty told Risk Adviser.
“The decision and the law is good because it’s interpreting the Bankruptcy Act in the right way and so I expect if the question comes before other state and territory courts they’re likely to follow this decision.”
Mr Moriarty added that insurers cannot adjust their construction or drafting of TPD policies because the protection is a statutory one.
“No one, including insurance companies, can contract out of the Bankruptcy Act’s statutory provisions,” he said.
“All [the decision is] telling insurance companies is that they need to pay a TPD claim whether the claimant’s in bankruptcy or not.
“It’s not a factor that should come into their thinking and, in this case, Zurich thought Mr Berryman’s bankruptcy made a difference to whether or not they needed to pay under the policy and it turned out they were wrong and that was not the correct interpretation of the Bankruptcy Act.”
Bravura to acquire Midwinter for $50m
Bravura Solutions has announced it has entered an agreement to acquire financial...
IRESS records 10% profit growth in 1H19
Advice software provider IRESS noted significant revenue growth in its APAC fina...
FPA members to be given education discounts
The Financial Planning Association of Australia has teamed up with five higher e...