Commonwealth Consolidated Acts Commonwealth Consolidated Acts(1) A contract of insurance is a contract based on the utmost good faith and there is implied in such a contract a provision requiring each party to it to act towards the other party, in respect of any matter arising under or in relation to it, with the utmost good faith.
(2) A failure by a party to a contract of insurance to comply with the provision implied in the contract by subsection (1) is a breach of the requirements of this Act.
(2A) An insurer under a contract of insurance contravenes this subsection if the insurer fails to comply with the provision implied in the contract by subsection (1).
Civil penalty: 5,000 penalty units.
(3) A reference in this section to a party to a contract of insurance includes a reference to a third party beneficiary under the contract.
(4) This section applies in relation to a third party beneficiary under a contract of insurance only after the contract is entered into.