Opinion Number. 1462


Insurance whether Insurance power confers right to limit classes of insurers and insured: power of states to legislate in respect of prohibited or excluded classes: inconsistency: commonwealth legislation covering the field

Key Legislation

constitution ss 51(xiv), (xxxix), 109: Life assurance Companies Act 1905

The Leader of the Government in the Senate, Parliament House

The Leader of the Government in the Senate has submitted the following questions to me for advice:

  1. Whether the power to make laws for the peace, order and good government of the Commonwealth with respect to ‘Insurance’ confers a right to limit the classes of insurers and insured.
  2. If the answer to (1) be in the affirmative then as the power of the Commonwealth Parliament is a concurrent power would such limitation reserve to the State the right to legislate in respect of the prohibited or excluded classes.

I am of opinion that under placita (xiv) and (xxxix) of section 51 of the Constitution the Commonwealth has power to legislate so as to prevent insurance being effected in certain cases.

Such legislation already exists in the form of the Life Assurance Companies Act 1905. I am not aware of any judicial decision which reflects upon the validity of that statute.

If the Commonwealth passes legislation purporting to cover the whole field of any class of insurance (i.e. life, fire, marine, etc.), any legislation by the States purporting to effect other control of such insurance would probably be invalid. Particularly would this be the case where the Commonwealth by express legislation denies to certain persons under specified circumstances the right to effect insurances. Any legislation of the States purporting to regulate or permit the forbidden classes of insurance would in my opinion be of no effect.

[Vol. 24, p. 610]