It’s may be as exciting as watching paint dry – and no semi-gloss would take as long – but the second phase of the review into the Insurance Contracts Act 1984 has finally been released.

The review notes the Act has been generally operating satisfactorily for insurers and insureds, but several areas need to be changed before the Federal Government prepares a draft bill.

About 40 areas, relating to general and life insurance, are earmarked for amendment. They include the Act’s scope and application, alternatives to written communication, ASIC powers, disclosure and misrepresentation, standard cover, product disclosure statements, remedies of insured and insurer, restrictions on insurer contractual rights and remedies, innocent co-insureds, third-party beneficiaries, subrogation, and the interface between the Act and the Financial Services Reform Act.

There has been some concern about the tight timeframe for digesting the review. The report notes that if the recommendations are implemented there should be further consultation on the details of legislative amendments.

The review deals with all of the Act except section 54. The Government requested that this section be examined first due to concerns about its effect on the availability and affordability of professional indemnity insurance.

A draft bill will be available for public comment. It will include proposed amendments to section 54, taking into account consultations that followed the exposure draft.