Document ID: chunk:federal_register_of_legislation:C2013A00075:clause:5_10
Version: federal_register_of_legislation:C2013A00075
Segment Type: clause
Provision Reference: sch 5 cl 10
Character Range: 40009–42195

10  Subsection 29(6)
Repeal the subsection, substitute:
 (6) If the insurer has not avoided the contract or has not varied the contract under subsection (4), the insurer may, by notice in writing given to the insured, vary the contract in such a way as to place the insurer in the position (subject to subsection (7)) in which the insurer would have been if the duty of disclosure had been complied with or the misrepresentation had not been made.
Note: This subsection does not apply in relation to a contract with a surrender value, or a contract that provides insurance cover in respect of the death of a life insured (see subsection (10)).
 (7) The position of the insurer under a contract (the relevant contract) that is varied under subsection (6) must not be inconsistent with the position in which other reasonable and prudent insurers would have been if:
 (a) they had entered into similar contracts of life insurance to the relevant contract; and
 (b) there had been no failure to comply with the duty of disclosure, and no misrepresentation, by the insureds under the similar contracts before they were entered into.
 (8) For the purposes of subsection (7), a contract of life insurance (the similar contract) is similar to another contract of life insurance (the relevant contract) if:
 (a) the similar contract provides insurance cover that is the same as, or similar to, the kind of insurance cover provided by the relevant contract; and
 (b) the similar contract was entered into at, or close to, the time the relevant contract was entered into.

Date of effect of variation of contract
 (9) A variation of a contract under subsection (4) or (6) has effect from the time when the contract was entered into.

Exception for contracts with a surrender value or that provide cover on death
 (10) If the contract is a contract with a surrender value, or a contract that provides insurance cover in respect of the death of a life insured:
 (a) the insurer may vary the contract under subsection (4) before the expiration of 3 years after the contract was entered into, but not after that period; and
 (b) subsections (6), (7) and (8) do not apply in relation to the contract.