The Australian Securities & Investments Commission has lodged an appeal against the Federal Court’s dismissal of part of its case against HCF Life Insurance Company Pty Ltd concerning a “pre-existing condition” term used across a range of HCF Life products. The Court found on 28 October 2024 that the term was liable to mislead the public but was not an unfair contract term, and ASIC is challenging that unfairness finding. ASIC alleges the term allowed HCF Life to deny cover based on a later medical opinion that signs or symptoms existed before the contract, even without a diagnosis, and suggested cover could be denied even where the consumer was unaware of the condition and a reasonable person could not have been expected to be aware of it. The appeal focuses on concerns that the Court took account of the ameliorating effect of section 47 of the Insurance Contracts Act in assessing unfairness, and that a term can be found misleading yet not unfair. The term appeared in substantially identical form in product disclosure statements for HCF Life’s Recover range products Cash Back, Smart Term and Income Assist, and was replaced on 9 November 2023; ASIC does not consider the replacement term misleading or unfair. Following the liability decision and in consultation with ASIC, HCF Life wrote to affected current and former policyholders and published a corrective notice, which remains on its website, and the Federal Court fined HCF Life AUD 750,000 on 8 May 2025 for using a misleading contract term and required corrective disclosures.
Australian Securities & Investments Commission 2025-07-07
Australian Securities & Investments Commission appeals Federal Court finding that HCF Life pre-existing condition term was not unfair
The Australian Securities & Investments Commission (ASIC) has appealed the Federal Court's decision dismissing part of its case against HCF Life Insurance Company Pty Ltd over a "pre-existing condition" term. The Court found the term misleading but not unfair, which ASIC contests. ASIC argues it allowed denial of coverage based on retrospective medical opinions. The term, used in HCF Life's Recover range, was replaced in November 2023. HCF Life contacted affected policyholders, published a corrective notice, and was fined AUD 750,000.