Commissioner Hayne challenges Mr Whelan on why insurance is different when it comes to unfair contract terms.

Mr Whelan says if insurers can't be certain about the extent of a risk they are undertaking "it is very difficult to price that risk".

“There are terms within the contract which should not be challengeable because they define the risk being undertaken," he says.

He warns that levels of uncertainty could be introduced that may be unacceptable to insurers and reinsurers and he would be concerned if changes were introduced that led to a need to rewrite or reprice products, or withdraw from some markets.