In amending the General Insurance Code of Practice and expediting its next independent review, the Insurance Council of Australia (ICA) is hoping to appease Canberra politicians hell-bent on removing the industry’s right to self-regulate.

After the catastrophes that ravaged Australia last year, both the Queensland Floods Commission of Inquiry and the House of Representatives Standing Committee on Social Policy and Legal Affairs Inquiry zeroed in on claimants’ frustrations over claims decision and finalisation delays and a lack of communication from insurers.

Queensland Premier Anna Bligh famously called for insurers to “name and shame themselves” by taking out advertisements in local and state newspapers when they are repeatedly in breach of the code, and the Queensland Government also argued for the introduction of new measures to force insurers to pay claims regardless of their validity if they are not dealt with in reasonable time.

Amendments to the code announced last week have seen claims decision timeframes specified, with new clauses set for determining claims during declared disaster events.

The code was first drawn up in 1994, and has already undergone several extensive renovations. Three-yearly independent reviews have gradually made it more effective for consumers, although a report by the Financial Ombudsman Service two years ago revealed 52 of the 108 companies reviewed in 2008/09 committed breaches of the code. However, most of the breaches were technical and involved smaller insurers.

While consumer advocates’ calls for more transparency in the code may have finally been met in the latest changes, some areas of contention undoubtedly remain: for example, loss adjusters’ demands for people handling insurance claims to have minimum standards of insurance knowledge.

How well the industry performs in meeting the standards established in the latest code overhaul has now been opened up to increased scrutiny, with a commitment to make public from this year the annual report of the code compliance committee, which examines breaches of the code and lists any binding sanctions imposed on ICA member companies.

Under the upgraded code, an insurer denying a claim must now explain the decision in writing, and, upon request, give claimants access to copies of any information used to reach the decision – including reports from service providers and external experts – within 10 days.

This amendment seeks to improve communication with claimants and give them access to the details, which should help negate some complaints and demystify claims assessment. Hopefully it might also lead to an increased understanding of policy coverage in the wider community.

There are also new provisions around committing to train staff to deal with customers more professionally, and to train them to better understand the customer situation, “particularly in the aftermath of a catastrophe or disaster”.

By amending the code ahead of the independent review, which will now commence in June, the insurers are obviously hoping to cool the political heat and avoid the statutory regulation of service standards.

Whether they succeed may have as much to do with public perceptions and politics as with the revised code itself.

But some sticky points remain. As foreshadowed last year by ICA CEO Rob Whelan, the latest updates stop short of dictating timeframes for the completion and closure of claims due to the dependence on others in the repair and restoration chain such as tradesmen.