Overview

The Export Finance and Insurance Corporation Act 1991 (Approved Causes of Loss) Declaration 2019, issued by the Export Finance and Insurance Corporation (EFIC), was enacted to declare specific causes of loss for the purposes of Part 4 of the Export Finance and Insurance Corporation Act 1991. This instrument was introduced to streamline the process of applications for insurance contracts by clearly defining the approved causes of loss, ensuring that applicants can easily reference these in their applications to EFIC. The instrument aims to provide a transparent and updated list of approved causes of loss, replacing the previous Declaration dated 3 September 2004, thereby ensuring that the legal framework remains current and relevant. The Declaration was made without public consultation, as it does not alter existing arrangements and is considered mechanical in nature. It is compatible with human rights and freedoms as recognised or declared under the Human Rights (Parliamentary Scrutiny) Act 2011.

Scope and Application

The Export Finance and Insurance Corporation Act 1991 (Approved Causes of Loss) Declaration 2019 applies to the Export Finance and Insurance Corporation (EFIC) and is concerned with the approved causes of loss for insurance purposes under the Act. This legislative instrument specifies the causes of loss that are recognised for the purposes of allowing an applicant to specify an approved cause of loss in an application to Efic for a contract of insurance under section 22 of the Act. The instrument has a Commonwealth jurisdictional reach and is applicable nationwide. There are no exclusions or exemptions specified in the text, and the instrument does not indicate any thresholds. The application of the Act may be extended or restricted through subordinate instruments, although such details are not elaborated in the provided text.

Key Provisions

The Export Finance and Insurance Corporation Act 1991 (Approved Causes of Loss) Declaration 2019 (the Declaration) sets forth the approved causes of loss under the Export Finance and Insurance Corporation Act 1991 (the Act). Clause 6 of the Declaration specifies these approved causes of loss, which are the only circumstances under which an applicant can claim for insurance under section 22 of the Act. This clause ensures that all claims must fall within the predefined categories to be eligible for coverage, thereby maintaining a standardised approach to risk assessment and claims processing by the Export Finance and Insurance Corporation (EFIC). The Declaration imposes specific obligations on applicants seeking insurance under the Act. As per section 22 of the Act, applicants must clearly specify an approved cause of loss in their insurance application. This requirement ensures that all claims are assessed against the predefined categories of loss, facilitating a uniform evaluation process. Furthermore, the Declaration necessitates that EFIC adheres to the criteria set forth in Clause 6 when processing and evaluating insurance claims, thereby maintaining consistency and predictability in the claims process. Failure to comply with the approved causes of loss as outlined in the Declaration may result in the rejection of an insurance claim. While the Declaration does not explicitly outline criminal or civil penalties for non-compliance, any breach of the Act's provisions could potentially lead to legal consequences. For instance, section 22 of the Act allows EFIC to deny claims that do not align with the approved causes of loss. Additionally, any misrepresentation or fraudulent activity in the application process could attract penalties under relevant fraud legislation, including potential fines and imprisonment. The precise penalties would depend on the specific nature of the breach and the applicable laws at the time of the offence.