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The FOS Approach to Section 47

Sickness and disability insurance policies commonly contain an exclusion for claims resulting from a condition that the consumer had before the contract of insurance was entered into (a ‘pre-existing condition’).

Section 47 of the Insurance Contracts Act 1984 (the Act) limits the circumstances where an insurer can rely on such a provision.

An insurer cannot rely on such a provision where the insured was not aware of, and a reasonable person could not be expected to have been aware of, the pre-existing condition (the Act uses the terms ‘sickness’ or ‘disability’).