The general insurance industry began in Australia in about the 1830s.[1] From the 1870s, the commercial insurance industry grew rapidly.[2] By the early twentieth century, the focus of the Australian insurance industry was life insurance, fire insurance and marine insurance (which had by then been an important form of insurance for many centuries in England).[3] In 1904, there were 37 insurance companies operating in Australia, 22 of which were British, 11 of which were Australian, and three of which were based in New Zealand.[4] Many of those companies continue to exist in some form today.[5]
In the first half of the twentieth century, a number of states developed their own state insurance (non-tariff) companies.[6] Some of these companies have since become purely commerical enterprises.[7]
The Federal Parliament did not become actively involved in regulating insurance until the passage of the Insurance Act 1973 (Cth) (the Insurance Act).[8] Since that time, a number of significant reforms have taken place. These include the introduction of the Insurance Contracts Act 1984 (Cth) (the Insurance Contracts Act). That Act was passed in response to the Australian Law Reform Commission’s 1982 report into insurance, which contained ‘a detailed analysis of the common law and also a series of almost revolutionary recommendations for reform’.[9] Most of the Commission’s recommendations were given effect in the Insurance Contracts Act.[10]
As I will explain further below, the prudential regulation of insurers has developed separately, principally through the Insurance Act and the Life Insurance Act 1995 (Cth) (the Life Insurance Act).[11]
[1] Background Paper No 14, 31 [2.1].
[2] Background Paper No 14, 31 [2.2].
[3] Background Paper No 14, 29–31 [1.1]–[1.7], [2.1].
[4] Background Paper No 14, 31–2 [2.2].
[5] Background Paper No 14, 32 [2.2].
[6] Background Paper No 14, 33 [2.6].
[7] Background Paper No 14, 33 [2.6].
[8] See the caveat in Background Paper No 14, 33 [3.1], and more generally at 34 [3.3].
[9] Background Paper No 14, 33 [3.1].
[10] Background Paper No 14, 33 [3.1].
[11] Background Paper No 14, 34 [3.3].