The decision of Taylor v Asteron Life Ltd is important because it upholds an insurer’s right to cancel and seek damages from an insured guilty of making a fraudulent claim.  

Rather than applying common law principles of the duty of good faith, the insurer’s remedies were dealt with under the Contracts and Commercial Law Act 2017 (CCL Act).

FACTS

Taylor was a self-employed insurance broker who, due to illness, claimed on an income protection policy held with Asteron.  

Asteron accepted the claim and made payments to Taylor from December 2009. Taylor regularly reported to Asteron on the nature of his illness and said he had not been working or earning income above the threshold required to continue to be entitled to the policy benefits.  

Asteron ceased making payments in September 2014, because it was unable to obtain adequate information from Taylor on his income and work history.

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