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In an industry first, the new code of practice governing the general insurance industry will provide penalties of up to A $ 100,000 ($ 75,000) for material breaches of the code.
As of today, the updated code includes enhanced protections for customers in line with community expectations and has been developed by insurers in consultation with a range of stakeholders, including consumer groups, said the Insurance Council of Australia (ICA) in a statement.
Characteristics of the new Code include:
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Penalties for material violations of the Code of up to AU $ 100,000 in the form of community benefit payments;
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Independent application through the Code Governance Committee (CGC);
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Comparison of costs between new and previous policies on renewal notices;
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Responsibility for the quality of repair work undertaken on behalf of insurers;
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Streamlined complaints process;
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Mandatory standards for complaints investigators;
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Clear deadlines for responding to complaints, complaints and requests for information;
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Cash regulations better explained;
Scope
The types of insurance covered by the Code include motor vehicles, home construction, home contents, sickness and accident, travel insurance, personal and household property.
The Code includes provisions for clients facing vulnerability, financial hardship and domestic violence that were put into practice in 2020 and early 2021 as part of insurers’ response to COVID-19.
The ICA will launch an information campaign in the coming months to publicize the new code and intends to seek approval of the code by ASIC once ASIC updates the appropriate regulatory guide. .
Trust
Mr Andrew Hall, CEO of ICA, said: “Australian households rely on their insurer to help them get back on their feet after a crisis or unforeseen event. It is therefore essential that trust between insurers and their clients is ensured.
“The new code of practice for general insurance sets out clear obligations for insurers with independent application through the code’s governance committee, which can impose more severe penalties for violations.
“It underscores the industry’s commitment to openness, fairness and honesty in all dealings with customers.”
“The new code includes a range of ‘client-centric’ provisions, including ‘stronger protections for clients’ in areas such as cost transparency, assistance to those who are vulnerable and facing financial hardship and a streamlined complaints process. “
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