Requirement to take out insurance or to insure with particular insurer or on particular terms
143 Requirement to take out insurance or to insure with particular insurer or on particular terms
A credit provider or a supplier must not:
require a debtor or guarantor to take out insurance or to pay the cost of insurance taken out or arranged by the credit provider or supplier; or
represent to a debtor or guarantor that the debtor or guarantor is required to pay the cost of any such insurance;
unless the insurance is compulsory insurance, mortgage indemnity insurance, insurance over mortgaged property or insurance of a nature and extent approved for the purposes of this section by the regulations.
Criminal penalty: 100 penalty units.
A credit provider or a supplier must not, in connection with a credit contract or a sale contract in relation to which there is a tied loan contract or a tied continuing credit contract:
require a debtor or guarantor to take out insurance with a particular insurer (unless the insurer is the only insurer providing insurance of the relevant kind or the requirement is exempted from the operation of this section by the regulations); or
make any unreasonable requirement as to the terms on which the debtor or guarantor is to take out insurance.
Criminal penalty: 100 penalty units.
Subsections (1) and (2) are offences of strict liability.
For strict liability, see section 6.1 of the Criminal Code.
Civil effect
If the credit provider or supplier contravenes this section, the insured is entitled to recover the whole of the premium paid under the contract from the credit provider or supplier, as the case requires.
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