---
title: "Review claims handling against the duty of utmost good faith"
url: "https://ailawframework.com/practice/insurance-law/review-claims-handling-against-the-duty-of-utmost-good-faith"
type: "task"
site: "AI Law Framework"
id: "A22-MA20261022-4"
practice_area: "Insurance Law"
tier: "red"
lawyer_review: "required"
last_reviewed: "2026-10-22"
---

# Review claims handling against the duty of utmost good faith

> From the claims file, build a dated table of what the insured asked for, what the insurer did, and the date of each decision, payment, request for information or denial.…

Canonical page: https://ailawframework.com/practice/insurance-law/review-claims-handling-against-the-duty-of-utmost-good-faith  
Last reviewed: 2026-10-22

Site index for agents: https://ailawframework.com/llms.txt

## Key facts

| Fact | Value |
| --- | --- |
| Practice area | [Insurance Law](https://ailawframework.com/practice/insurance-law.md) |
| Human involvement | Red: Lawyer writes; AI may check, clarify or collect data |
| How AI is used | From the claims file, build a dated table of what the insured asked for, what the insurer did, and the date of each decision, payment, request for information or denial. Do not write a conclusion that the insurer did or did not act in good faith, and do not draft the letter that says so. |
| What the lawyer must review | The lawyer writes the advice. Section 13(1) implies into a contract of insurance a provision requiring each party to act towards the other, in respect of any matter arising under or in relation to the contract, with the utmost good faith. A failure to comply is a breach of the requirements of the Act. An insurer who fails to comply contravenes section 13(2A), and the civil penalty stated in the section is 5,000 penalty units. A third party beneficiary is a party for section 13 only after the contract is entered into. The lawyer decides whether the claims conduct met that standard. |
| Written for / versions | 1 jurisdiction versions below |

## Checking plan

**Lawyer-led judgement**

The lawyer makes the substantive assessment. Any permitted AI assistance remains supporting work with its own checks.

- What the AI does: From the claims file, build a dated table of what the insured asked for, what the insurer did, and the date of each decision, payment, request for information or denial. Do not write a conclusion that the insurer did or did not act in good faith, and do not draft the letter that says so.
- What the lawyer does: The lawyer writes the advice. Section 13(1) implies into a contract of insurance a provision requiring each party to act towards the other, in respect of any matter arising under or in relation to the contract, with the utmost good faith. A failure to comply is a breach of the requirements of the Act. An insurer who fails to comply contravenes section 13(2A), and the civil penalty stated in the section is 5,000 penalty units. A third party beneficiary is a party for section 13 only after the contract is entered into. The lawyer decides whether the claims conduct met that standard.
- Who reviews: Responsible lawyer with competence in the matter
- Basis: Practical workflow informed by the linked primary sources; the traffic light and working checks are editorial guidance, not a court classification.
- Why: The level reflects what the work is, the consequence of an error, and how much of the output the lawyer must independently re-derive.
- Restriction: The lawyer makes the substantive assessment. Any permitted AI assistance remains supporting work with its own checks.

## Checks the lawyer makes

1. The table cites the file note or letter for each row. It contains no adjective about good faith.
2. The lawyer applies section 13(2A) to the insurer's conduct and does not invent a dollar penalty. The section states 5,000 penalty units.
3. A third party beneficiary is not treated as owed the duty before the contract exists. Section 13(4) says the section applies to them only after the contract is entered into.
4. The letter to the insurer or the insured is written by the lawyer.

## Notes

- These are suggested working checks. Confirm the required checking with the responsible lawyer before work starts; the checking approach does not establish permission to use AI.

## Sources

- [Insurance Contracts Act 1984 (Cth) section 13](https://classic.austlii.edu.au/au/legis/cth/consol_act/ica1984220/s13.html) (checked 2026-10-22)

## Jurisdiction versions

| Jurisdiction | Level |
| --- | --- |
| [United States](https://ailawframework.com/practice/insurance-law/review-claims-handling-against-the-duty-of-utmost-good-faith/united-states.md) | Yellow |

*Practice guidance for planning and review. Confirm current primary sources and the requirements of the actual matter. This is general information, not legal advice.*