The Insurance Contracts Amendment Bill 2012 has been passed by both Houses.

UPDATE: Act assented to on 15 April 2012

Insurance providers will be required to use a standard definition of the term flood (and all related terms) in all Home Building and Home Contents (combined and individual) (HBHC), small business and strata title insurance policies and their supporting documents. The term “flood” will be defined in regulations.

It is expected to be consistent with the wording proposed in the Government’s Consultation paper, “Reforming Flood Insurance: Clearing the Waters”. The proposed wording is:

Flood means the covering of normally dry land by water that has escaped or been released from the normal confines of:
– any lake, or any river, creek or other natural watercourse, whether or not altered or modified; or
– any reservoir, canal, or dam.

The regulations will commence two years after the day the regulations are made.

The Bill will also implement a requirement for an insurance provider to provide consumers with a Key Facts Sheet (KFS) for Home Building and Home Contents (combined and individual) (HBHC) insurance contracts in accordance with the regulations.