The Full Federal Court of Australia has dismissed an appeal against its earlier ruling that insurer Auto & General did not include an unfair term in its home and contents insurance contracts, the Australian Securities and Investments Commission (ASIC) said in a press release on Friday.
ASIC’s appeal focused on a policy clause requiring customers to notify Auto & General if “anything” changed in their home or contents. This clause appeared in Product Disclosure Statements (PDS) issued under multiple brands, including Auto & General Home and Contents, Budget Direct, Australia Post, ING, Catch Insurance, Virgin Insurance, and Qantas Insurance.
The regulator argued that the clause was vague and misleading about the obligations placed on consumers, and that it granted the insurer an unfair right to deny or reduce claims, potentially beyond what is allowed under the Insurance Contracts Act.
However, the Court found ASIC’s interpretation inconsistent. The Commission claimed the clause should be read as requiring notice only of material changes, while also asserting that the average consumer would not interpret it that way. The judges said both arguments could not be true simultaneously. They held that if the clause referred only to material changes, it could not also be misleading or unfair. The Court therefore upheld the original ruling that the term was not unfair under section 12BG(1) of the ASIC Act.
ASIC had launched proceedings against Auto & General in April 2023. In response, the insurer issued Supplementary Product Disclosure Statements to replace the contested clause, followed by revised PDS documents reflecting the new language.
The Federal Court initially dismissed ASIC’s case in March 2024. The appeal, heard in August, was formally dismissed by the Full Federal Court in June 2025.
ASIC says it is reviewing the decision.
The regulator has been tightening its watch on insurers recently, urging property insurers to strengthen oversight and improve consumer communication. It has also taken enforcement action against several insurers—such as Choosi, Hollard, and Zurich—over consumer-related failings.
