The duty of utmost good faith under s.13 of the Insurance Contracts Act 1984 (Cth) applies to the investment component of an investment-linked life insurance contract, not merely to the insurable risk. An insurer who knows that policyholders are investing on the assumption that a particular administrative practice (here, historical pricing) will continue, and who intends to change that practice, has a duty to disclose that intention; failure to do so constitutes unconscionable conduct giving rise to estoppel and misleading and deceptive conduct under s.52 TPA. However, the minimum equity arising from such estoppel does not extend to expectation or loss of bargain damages but is limited to compensation for detriment suffered during a reasonable notice period.
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