Lloyd's Market Association Bulletin

LMA21-043-JZ | 30 November 2021

Updated Australian Consumer Disclosure Notices – New Duty on Consumers to Take Reasonable Care Not to Make a Misrepresentation

In Lloyd's Market Bulletin Y5345 Lloyd’s Australia detailed the changes to the Duty of Disclosure relating to consumer contracts resulting from amendments to the Australian Insurance Contracts Act 1984 (Cth) (ICA). From 5 October 2021, consumer insureds have a new duty to take reasonable care not to make a misrepresentation to the insurer before entering into consumer insurance contracts (CIC). These are insurance contracts where the insurance is obtained wholly or predominantly for the personal, domestic or household purposes of the insured, or the insurer opts into the CIC regime. 

As a result, Insured’s Duty to Take Reasonable Care Not to Make a Misrepresentation notices (LMA9109A , LMA9110A , LMA9111A  and LMA9112A ) have replaced the Australian Duty of Disclosure notices (LMA9109, LMA9110, LMA9111, LMA9112 and LMA9113) to reflect the new duty. Australian Duty of Disclosure notices LMA9109, LMA9110, LMA9111, LMA9112 and LMA9113 must not be used for any general insurance contracts entered into, renewed or varied on or after 5 October 2021.  

Managing agents are advised to consult with local coverholders/agents on the implications of the above legal changes and to take independent legal advice as appropriate where required.  

As with all LMA model clauses, these clauses are purely illustrative and are distributed for the guidance of LMA members, who are free to agree to different conditions or amend as they see fit. The clauses are available on the Lloyd’s Wordings Repository (LWR), which can be accessed via www.lloydswordings.com.

Jasmine Zacher
Executive, Technical Underwriting