The Australian Securities and Investments Commission (ASIC) says it generally supports recommendations in the Deloitte report into last year’s floods response, but suggests insurers may need “an external deadline” to ensure actions are fully delivered.

The Deloitte report, commissioned by the Insurance Council of Australia (ICA), examined the sector’s response to last year’s February/March floods in NSW and southern Queensland. ICA has accepted the recommendations in principle.

ASIC earlier this year released its own review of home insurance claims, with the report having a different scope to Deloitte’s work, while reaching many similar conclusions. 

The regulator says it’s concerned that Deloitte found that that not all insurers were making the changes or investments to the scale needed to address key weaknesses identified, and that some firms had post-event reviews still underway 18 months after the catastrophe.

Insurers may need “an external deadline and transparency in implementation” to ensure improvements are prioritised and delivered in full, it says in a submission to the House of Representatives Economics Committee inquiry into responses to the wider flooding.

“We suggest the inquiry examine what further action by insurers is needed to implement the recommendations and a timeframe for doing so,” it says.

ASIC also suggests the inquiry consider insurers’ plans to improve claims and complaints handling resourcing, investment levels in remediating systems and data deficiencies that were revealed by the floods, and the issue of “wear and tear” exclusions.

Insurers’ under-resourcing of dispute resolution remains an issue following an increase in complaint volumes, ASIC says.

The regulator last month sought updates on resourcing efforts to deal with issues and delays affecting claims handling and dispute resolution, and says replies show an overall increase in claims handling resourcing, but with the level of change varying significantly between firms.

“Importantly, the responses also revealed that, overall, increases in dispute resolution resourcing were not commensurate with increased complaint volumes,” the submission says. “This indicates that general insurers’ under-resourcing of dispute resolution remains an issue.”

Several reports have identified exclusions around “wear and tear” or “maintenance” failings as a concern for policyholders and an issue driving disputes.

ASIC says the inquiry may want to follow up ICA responses in the area, and examine whether insurers have an adequate process for denying claims due to the terms.

“The inquiry could also consider the viability of standard ‘wear and tear’ and/or ‘maintenance’ terms and an implementation timeframe,” it says.

Submissions are available here.