Barry Nilsson Lawyers has been working with the Commission as it plans to introduce the legislation in what is being described as a need to provide foreign investors and local businesses with financial stability and security in a growing economy.

The firm’s insurance and health partner, Robert Samut, is leading the team.

“The reason for the introduction of such legislation is due to the fact that the insurance industry is unique in so many ways. Unlike any other business, insurers are in the business of selling promises,” he said.

“Their promise is to pay a claim, or for example replace certain property should certain events occur. How do you sell a promise? You wrap it up in an insurance contract.”

“It is the insurance policy that you hand to the consumer that contains this intangible, invisible promise. What the proposed General Insurance Contracts Bill does is give that promise a protective coating,” Samut said.

The firm itself said PNG is experiencing a resources boom which has the potential to provide them and their 6 million residents with a standard of living far beyond what they have today.

A recent announcement by ExxonMobil confirms an $18billion investment in liquefied natural gas in PNG with more gas projects looking increasingly likely.

This announcement, added to the existing production in major gold, nickel and copper projects and a visionary plan to pipe water from PNG to Queensland, and you have a small country on the verge of big things.

The PNG Insurance Commissioner now aims to provide a market where insurers can transact business freely with consumers who have confidence in the policies which they are acquiring.

Samut, with consultant Samantha Traves, have travelled to PNG to facilitate seminars for attendees from insurance, legal and consumer groups to ensure they are able to hear about and have their say on the draft laws.

The most recent seminar on 29 July saw 150 stakeholders attend.

“At the end of the day, Papua New Guinea will have one of the most effective pieces of insurance contracts legislation anywhere in the world as a result of the learnings we’re able to pass on to them from the Australian legislation,” said Samut.

Submissions will be accepted from the industry until mid September 2010 with a view to introducing the new legislation in early 2011.

PNG is looking at introducing this legislation at the same time as the UK is also starting to look at the reform of its insurance contracts laws, the firm also noted.