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ASIC updates information sheets on new protections under the unfair contract terms laws


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ASIC has today updated its information sheets on unfair contract terms protections for consumers and small businesses. The protections will be extended to insurance contracts following the Government’s enactment of the Financial Sector Reform (Hayne Royal Commission Response—Protecting Consumers (2019 Measures)) Act 2020. The changes will take effect from 5 April 2021.

Information sheet 210 (INFO 210) and information sheet 211 (INFO 211) now provide information about how the unfair contract terms will apply to insurance contracts from 5 April 2021.

In preparation for the unfair contract term protections applying to insurance contracts, ASIC is undertaking targeted supervisory work with industry.

ASIC has been working with industry groups and insurers to gauge how insurers are tracking in the lead up to the new protections commencing, and to help inform industry about those new obligations. This includes discussions about potential contract terms which may raise concerns under the unfair contract terms protections.

The focus of ASIC’s supervisory work is on:

  • terms that allow an insurer to cash settle a claim based on the cost of repair to the insurer
  • terms that are an unnecessary barrier to a consumer lodging a claim
  • terms that reduce the cover offered where compliance with the preconditions is unfeasible; and
  • terms that use an outdated, and therefore inaccurate or restrictive, medical definition.

ASIC will continue to engage with industry in the lead up to the commencement of the new laws.


  • Information sheet Unfair contract term protections for consumers (INFO 210)
  • Information sheet Unfair contract term protections for small businesses (INFO 211)


From 5 April 2021, the protections will apply to a new insurance contract entered into or renewed on or after 5 April 2021. It will also apply to a term in an insurance contract that is varied on or after 5 April 2021.

ASIC’s recent supervisory work with industry has focused on terms outlined in Treasury’s Explanatory Memorandum to the Financial Sector Reform (Hayne Royal Commission Response – Protecting Consumers (2019 Measures)) Bill 2019.

ASIC’s previous work on unfair contract terms

In March 2018, ASIC released Report 565 Unfair contract terms and small business loans. The report provides general guidance to small business lenders to assess whether loan contracts meet the requirements under the unfair contract terms law. In 2018, following an ASIC review, Prospa made a number of changes to their loan contracts. See media release .

In 2019, ASIC commenced legal action against Bendigo and Adelaide Bank alleging that certain standard form small business loan contracts contained unfair terms. The Federal Court of Australia found in favour of ASIC see media release .

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Regulator Information

Abbreviation: ASIC
Jurisdiction: Australia

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