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APPENDIX 2 Sections 5, 6, 9 and 11 Insurance Law Reform Act 1977 (New Zealand)

Law of Insurance Warranties, The


Page 243

APPENDIX 2

Sections 5, 6, 9 and 11 Insurance Law Reform Act 1977 (New Zealand)

Section 5 Mis-statements in other contracts of insurance

  • (1) A contract of insurance shall not be avoided by reason only of any statement made in any proposal or other document on the faith of which the contract was entered into, reinstated, or renewed by the insurer unless the statement –
    • (a) was substantially incorrect; and
    • (b) was material.
  • (2) Nothing in this section shall –
    • (a) apply in respect of any contract of insurance embodied in a life policy; or
    • (b) limit the provisions of sections 4 and 7.

Section 6 Incorrectness and materiality defined

  • (1) For the purposes of sections 4 and 5, and notwithstanding any admission, term, condition, stipulation, warranty, or proviso in the application or proposal for insurance or in the life policy or contract of insurance, a statement is substantially incorrect only if the difference between what is stated and what is actually correct would have been considered material by a prudent insurer.
  • (2) For the purposes of sections 4 and 5, and notwithstanding any admission, term, condition, stipulation, warranty, or proviso in the application or proposal for insurance or in the life policy or contract of insurance, a statement is material only if that statement would have influenced the judgment of a prudent insurer in fixing the premium or in determining whether he would have taken or continued the risk upon substantially the same terms.

Section 9 Time limits on claims under contracts of insurance

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