Insurers responsible for significant breaches of the General Insurance Code of Practice can face a financial sanction of up to $100,000 – but the way in which these payments operate is still being finalised.

The new code, which came into full effect on July 1 last year, says one of the sanctions available to the Code Governance Committee (CGC) for significant breaches is a community benefit payment.

But the committee says it has yet to impose any such payments.

“The CGC has not applied any community benefit sanctions,” a spokeswoman told insuranceNEWS.com.au.

“The systems and processes that support the community benefit payment scheme are currently being finalised. This work is being led by the Insurance Council of Australia (ICA) in collaboration with the CGC.”

As previously reported by insuranceNEWS.com.au, the CGC released its annual report this week, noting a 27% rise in self-reported breaches.

There were 41,768 self-reported breaches during the 2020/21 financial year. The number of breaches in relation to claims shot up 56%, to 26,172.

ICA says it is reviewing the report for its implications.

“The ICA acknowledges the independent Code Governance Committee’s annual Industry Data and Compliance Report,” a spokesperson told insuranceNEWS.com.au.

“The report provides the context for the year it is reporting on – with significant challenges for both the industry and consumers in FY2021 arising from the Covid-19 pandemic."