Australia’s securities regulator appealed the Federal Court’s decision dismissing part of its proceedings against HCF Life Insurance Co concerning a “preexisting condition” term used in several of the life insurer’s products.
The regulator alleged the term misled the public and constituted an unfair contract term because it allowed HCF Life to deny coverage if a consumer failed to disclose a preexisting condition before entering the contract, the Australian Securities and Investments Commission stated.
The court ruled last October that the term misled the public but was not unfair, according to ASIC.
The regulator argued the Insurance Contracts Act prohibits insurers from excluding coverage for nondisclosure of a preexisting condition if the consumer was unaware of the condition at the time of purchase and a reasonable person in similar circumstances could not be expected to know of it.
ASIC stated the term appeared in product disclosure statements for insurance products issued by HCF Life, including all products in the company’s “Recover” range, such as Cash Back Smart Term Income Assist, which was replaced by Income Protect in October 2021.
The regulator filed civil proceedings in the Federal Court in 2023, alleging three types of insurance policies issued by HCF Life contained unfair contract terms and misled the public.
HCF Life replaced the “preexisting condition” term in its life insurance products in November 2023. ASIC said it does not consider the replacement term misleading or unfair.
In April 2025, in consultation with ASIC, HCF Life contacted affected current and former policyholders and published a corrective notice on its website.
These communications informed consumers of the liability judgment and invited them to contact HCF Life if they believed they were affected. The corrective notice remains available on the insurer’s website.
Australia’s securities regulator is the Australian Securities and Investments Commission (ASIC).
ASIC is the body responsible for overseeing and regulating Australia’s corporate, markets, financial services, and consumer credit sectors. It aims to ensure a fair, transparent, and efficient financial system
