MECON Insurance | Terms & Conditions

MECON Insurance Pty Ltd

Effective date: 1 December 2020

These Terms and Conditions of Trade (‘Terms and Conditions’) apply to financial services business between MECON Insurance Ltd (“MECON”) and any Licensed Insurance Broker (‘Broker’) from and including the Effective Date.  These Terms and Conditions of Trade shall replace any prior or existing service agreement between MECON Insurance Ltd and any Licensed Insurance Broker (“Broker”).

Any Broker wishing to advise on and deal in insurance products provided by MECON agrees to be bound by these Terms and Conditions.

1. Background

The Broker wishes to carry on a financial services business to provide financial advice for general insurance products, and deal in insurance products provided by MECON subject to the Broker’s registration and these Terms and Conditions. In consideration of the Remuneration (set out at section 7 below) by MECON, the Broker agrees to advise and deal in an insurance product provided by MECON.

2. Relationship

The Broker is registered to advise and deal in insurance products relevant to the insurance products distributed by MECON. The Broker will advise MECON immediately if its registration is varied, suspended or cancelled. The Broker acts as agent for its clients and is not an agent of MECON nor do these Terms and Conditions create any form of binder, employment, joint venture or partnership. The Broker will not provide or purport to provide any financial advice on behalf of MECON. The Broker is also responsible for the actions and omissions of its authorised contractors and agents. MECON acts as agent for insurers.

3. Arranging Insurance – Closings

New Business

Broker to advise in writing (email) that the quotation provided by MECON has been accepted prior to or on the date of inception of the contract of insurance.
MECON to issue a Cover Note confirming cover which will expire 30 days from the inception date of the contract of insurance.
Broker has 30 days from the inception date of the contract of insurance to provide MECON with the completed and signed proposal and closing (New Business documents).
MECON to issue a Certificate of Currency once the New Business documents have been received.

Renewal invitations to be sent at least 14 days in advance of the renewal inception date.
Broker to provide closing prior to the renewal inception date as confirmation to bind cover.
Alterations to Cover

MECON to issue Endorsement Quotation following request from Broker, where applicable.
Broker required to submit closing within 7 days of receiving the Endorsement Quotation to confirm cover is accepted.

4. Insureds

MECON will only contact insureds directly in the following circumstances:

Promoting, marketing and selling its services or products to the general public or to groups of persons who are members of a specific industry, association, profession, club or ethnic community provided that in doing so it will not target any client of the Broker specifically:
pursuant to statutory requirements;
if requested by the broker;
if requested by the insured in writing;
If required in relation to a claim; or
if the Broker has not provided or has not agreed to provide the Broker’s client with any of the relevant notices and information required pursuant to statutory requirements.

5. Duty of Disclosure

Before entering into a contract of insurance, an insured has a duty, at law, to disclose to MECON all material facts. This duty also applies when an insured renews, varies, extends or reinstates a contract of insurance.

A material fact is one that may influence a prudent insurer in deciding whether or not to accept the insurance and, if so, on what terms and Terms and Conditions (including the level of premium, limitations on cover, deductible and any other special requirements).

Examples of information an insured may need to disclose include but are not limited to the following:

anything that increases the risk of an insurance claim;
any criminal conviction or offence;
if another insurer has cancelled or refused to insure or renew insurance, has imposed special terms, or refused any claim;
any insurance claim or loss made or suffered in the past five years;
if an insured or any partner/s have been declared bankrupt, involved in a company or business which has become insolvent or subject to any form of insolvency administration.
These examples are a guide only. If there is any doubt as to whether a particular piece of information needs to be disclosed, this should be referred to MECON.


If an insured fails to comply with the Duty of Disclosure, MECON, on behalf of the insurer, is entitled to cancel the policy from its inception date.

6. Payment of Premium and Fees

The Broker will remit premium on a net basis and any applicable fees on a gross basis to MECON within 60 days of the contract of insurance inception date. All collected premium and applicable fees are to be held in an insurance broking client account in accordance with statutory requirements.

7. Remuneration

Unless the risk has been quoted net of Broker commission, MECON will pay the Broker commission on each base premium in accordance with the standard Broker commission agreed between the parties. For the avoidance of doubt, the base premium is exclusive of statutory charges (including GST), any fire services levy, Earthquake Commission levy or any other fee. Any change to the standard Broker commission must be communicated by providing 30 days’ written notice to the Broker.

8. Cancellation of the Contract of Insurance

MECON, on behalf of the insurer, may have the right to cancel the contract of insurance if premium is not paid in accordance with the terms of the contract of insurance.

MECON may otherwise cancel a contract of insurance at any time as allowed by law by providing 14 days’ written notice. In this case MECON will refund the unexpired portion of the premium.

The insured may cancel a contract of insurance at any time by notifying MECON in writing, in which case:

cancellation takes place when the notice is received; and
MECON, on behalf of the insurer, will retain or be entitled to retain the premium for the period during which the policy was in force together with any non-refundable government taxes, levies and duties.
If a contract of insurance is cancelled following the cooling off period (if applicable), the premium refund will be made up of two components:

(i) a prorated percentage of the net premium received by MECON; and
(ii) a prorated percentage of commission earned by the Broker for arranging the contract of insurance.

Note: Any fees charged by MECON are non-refundable unless the contract of insurance is cancelled within the cooling off period (if applicable) or is a full term cancellation. A cancellation fee may apply.

Interim Contracts of Insurance

An interim contract of insurance will be cancelled in the following circumstances:

the time when insurance cover commences under another contract of insurance issued by MECON or otherwise, being insurance cover that is intended to replace the insurance cover provided by the interim contract of insurance;
the time when the interim contract of insurance is cancelled; or
if the proposal is withdrawn, the time of the withdrawal.

9. Claims

The Broker will provide all reasonable assistance to MECON, or a party nominated by MECON, in respect of all claims.

10. Compliance with applicable requirements

The Broker will at all times comply with all legislation, regulations and codes of conduct affecting the Broker’s business.

11. Marketing material

Any marketing material for products distributed by MECON which is created or developed by the Broker must be approved by MECON. Also, the Broker will not change any marketing material provided by MECON without the prior written consent of MECON.

12. Disclosure of Rating

The Broker will ensure that, where MECON provides the Broker with documents that contains the insurer’s rating and other associated information to satisfy the requirements of the Insurance (Prudential Supervision) Act 2010, these documents are passed on to the prospective insured prior to the formation of the relevant contract of insurance.

13. Indemnity

Each party indemnifies the other, on demand, for all claims, damages, judgments, losses, costs (party/party basis) and expenses to the extent that they are reasonably incurred in connection with any breach by a party of either these Terms and Conditions or statutory requirements. The indemnity survives the expiry or termination of these Terms and Conditions.

14. GST

Where GST is payable, it must be calculated and paid in accordance with the Goods and Services Tax Act 1985. All amounts referred to in these Terms and Conditions are GST exclusive.

15. Buyer Created Tax Invoice (‘BCTI’)

Both parties agree that MECON may issue buyer created tax invoices for the supplies of the Broker’s services, in which case the Broker will not issue tax invoices for those supplies. Both parties are registered for GST and will notify the other if the registration ceases.

Both parties agree to comply with the New Zealand Inland Revenue Department’s requirements for a valid BCTI, which may be amended from time to time.

16. Dispute Resolution

The parties will attempt in good faith to negotiate any dispute between them in connection with these Terms and Conditions within 30 days after written notice from a party. If the parties cannot resolve the dispute by negotiation within 30 days from the original written notice, they will mediate in accordance with the protocol of the Arbitrators and Mediators Institute of New Zealand as applies at the relevant time.

This clause does not apply to any urgent court application, including interlocutory relief.

17. Records

The Broker will retain all books, records and correspondence (whether electronic or otherwise) created or held for the purpose of providing financial advice or dealing with the insurance products under these Terms and Conditions for a minimum of seven years or longer if required by any statutory requirements.

18. Privacy and Confidentiality


The Broker, if providing MECON with personal information about other individuals, shall comply with all relevant obligations under the New Zealand Privacy Act 2020, including having made or making the individual(s) aware that their personal information will be disclosed to MECON and handled in accordance with MECON Privacy Policy and the privacy statements in insurance documentation prior to collecting personal information.


Subject to section 4 (Insureds) , during and after termination of these Terms and Conditions, each party must keep confidential and must not use the other party’s Confidential Information except as necessary to perform under these Terms and Conditions or as required by law.

If a government, regulatory authority or court orders a party to disclose Confidential Information, that party will, to the extent permitted, immediately advise the other party and will disclose only such of the Confidential Information necessary to comply with the order.

Nothing in this section 18 (Privacy and Confidentiality) restricts the use or dissemination of Confidential Information obtained lawfully from a third party.

Each party authorises the other to disclose its Confidential Information to its insurers, (re)insurers, actuaries, auditors, professional agents and advisors and any related bodies corporate.
This clause survives termination.

For the purpose of the above Confidential Information means all information, data, practices and techniques relating to a party, or a related body corporate, customers, competitors, business, operations, strategies, computer systems, marketing systems and intellectual property or other property of which the other party becomes aware in negotiating or performing under these Terms and Conditions and arranging or issuing contracts of insurance.

Confidential Information does not include information that is in the public domain or later comes into the public domain (unless it came into the public domain by a breach of confidentiality of these Terms and Conditions).

19. Termination and Variation

These Terms and Conditions may be varied by MECON without cause by providing the Broker with 30 days’ written notice.

Further, these Terms and Conditions may be terminated without cause by either party by providing 90 days’ written notice to the other or immediately if a party has its registration suspended, varied or cancelled.

MECON also reserves the right to terminate these Terms and Conditions immediately by providing written notice to the Broker, if the Broker is subject to an insolvency event, breaches a material term or condition or engages in serious misconduct including fraudulent activity.

As soon as practicable after any termination of these Terms and Conditions and in any event within 90 days, each party must pay all money owed to the other if any, after taking into account any adjustments required and the Broker must return at its own expense all documents including marketing materials supplied by MECON.

20. Inconsistency and No Assignment

In the event of any inconsistency between these Terms and Conditions and the wording for the contract of insurance the wording for the contract of insurance will take precedence.

The Broker may not assign or otherwise transfer its rights or obligations under these Terms and Conditions without the prior written consent of MECON.

21. Governing Law

These Terms and Conditions will be governed by the laws of New Zealand and the parties irrevocably submit unconditionally to the nonexclusive jurisdiction of the Courts of New Zealand and any courts which may hear appeals from those Courts.