Liability of licensed insurers and insured persons where correct insurance premiums not paid
2.12 Liability of licensed insurers and insured persons where correct insurance premiums not paid
The fact that the correct insurance premium has not been paid in respect of a third-party policy does not affect the validity or operation of the policy.
A licensed insurer to whom an incorrect insurance premium has been paid may recover any balance outstanding of the premium from the person liable to pay it as a debt in a court of competent jurisdiction.
If—
an insured person under a third-party policy incurs a liability against which he or she is insured under the policy, and
the insured person avoided paying the correct premium for the third-party policy by making a statement in connection with the issue of the policy that the insured person knew was false,
the licensed insurer may recover from the insured person as a debt in a court of competent jurisdiction—
where the money paid and the costs incurred by the licensed insurer in respect of the liability do not exceed $5,000—the amount of the money paid and costs incurred, and
where the money paid and costs incurred by the licensed insurer exceed $5,000—$5,000.
The licensed insurer is not entitled to recover an amount under subsection (3) if the licensed insurer has recovered that amount in the exercise of any other right of recovery under this Division.
This Act’s bill:Explanatory memorandumSecond reading speech
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