Lloyd's Maritime and Commercial Law Quarterly
Marine insurance law in Australia: the Australian Law Reform Commission proposals
Sarah C.Derrington *
On 22 May 2001, the Commonwealth Attorney-General tabled the Report of the Australian Law Reform Commission (ALRC) on the Review of the Marine Insurance Act 1909 (MIA).
1
The ALRC has made 44 recommendations, which, if accepted by Parliament, will have a significant impact on the law of marine insurance in Australia. This paper sets out the recommendations and comments on the reason for the recommendation and the likely consequences of amendment in the terms suggested.
The approach to reform
1. The MIA should be retained as a separate legislative regime for marine insurance with the changes recommended elsewhere in this report
For Australia, the issue of retention of the MIA as a separate legislative regime was very real. Australia has several insurance law regimes, only one of which is the MIA. Most non-marine insurance is governed by the Insurance Contracts Act 1984 (ICA), which was enacted consequent upon a report of the ALRC in 1982.2
The ICA does not apply to contracts to which the MIA applies3
and in 1998 the ICA was amended expressly to include the insurance of pleasure craft within its ambit.4
The ICA also deals with the insurance of risks in respect of commercial aircraft and land transport. In addition to these two major Commonwealth legislative schemes, there are other federal and State schemes which deal with health insurance, insurance relating to workers’ compensation and third party motor vehicle insurance. Reinsurance is governed either by the common law or the MIA. The fact that the MIA essentially governs only commercial insurance, coupled with the need to give due weight to the interests of the marine insurance industry in having a regime consistent with international practice, led the ALRC to make recommendation 1 in the terms it did. The subsequent recommendations will have the effect, however, of modifying the range of contracts to which the MIA will apply and the way in which it will apply to them.5
* Barrister, Senior Lecturer in Law, University of Queensland, Member of the Advisory Committee to the ALRC for the Review of the Marine Insurance Act 1909.
1. ALRC 91 (April 2001).
2. ALRC 20 (1982).
3. ICA, s. 9(1)(d).
4. ICA, s. 9A, inserted by the Insurance Laws Amendment Act 1998, defines a “pleasure craft” to mean a ship which is owned by individuals and used wholly for recreational or sporting activities otherwise than for reward. For these purposes, any minor, infrequent or irregular use for other activities is ignored.
5. ALRC 91, para. 3.23.
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