Federal flood inquiry findings that reinforce code of practice review recommendations would increase pressure on insurers to adopt higher standards, parliamentary probe chairman Daniel Mulino says.

The House of Representatives committee inquiry into the 2022 floods response will deliver its report on October 18, while the independent code of practice review has released an interim report with 101 recommendations for consideration by the Insurance Council of Australia. 

“If we’re generating some recommendations where it’s unanimous and it aligns with the code committee, then I think it makes it hard for the industry to bat them away without very good reason,” Dr Mulino told insuranceNEWS.com.au.

The parliamentary inquiry has been looking at reforms across several layers and in terms of short- and long-term issues, with considerations including the role of regulators such as the Australian Securities and Investments Commission.

“We’re going to have a look at whether or not sufficient data-gathering powers are in place, and whether or not ASIC needs to gather and potentially publish more data,” Dr Mulino said.

Evidence has also touched on insurance affordability, and barriers to household mitigation action and inadequate links to premium reductions.

“At the household mitigation level, there was a lot of evidence given to us that insurers aren’t passing on premium reductions quickly enough,” Dr Mulino said. “I think often it’s just a question of there not being systems set up where insurers are provided with sufficient assurances that something’s been done that’s going to actually affect underlying risk.”  

Systems are needed that give households information on actions that make sense and are value for money, while providing evidence of work completed so insurers can respond, he says.  

“Regulators are going to be relevant here to make sure the premium reductions are passed on.”  

The inquiry has considered the ICA-commissioned Deloitte report, an ASIC report on claims handling, submissions, and evidence presented to hearings in Canberra and in flood-affected areas in Queensland, NSW, Victoria and Tasmania. 

“It really brings home, in a visceral way, the challenges that a lot of communities are facing and their resilience, frankly, in the way they have come together,” Dr Mulino said.

“It reinforces that we need to figure out ways to improve things in the short-term, with claims management and dispute resolution, but there are some very long-term underlying issues, which I think governments are really now stepping into. There’s a long-term set of issues which are going to require a continuation of effort.”

Dr Mulino says a lot of witnesses wanted a single point of contact through the claims process and easier ways to track progress.

“A significant proportion of the very long-running cases involved hydrology disputes, and wear and tear and maintenance disputes, and I don’t think it’s any surprise that Treasury and the ICA and Australian Competition and Consumer Commission are looking at standardising terms in this space as one possible response to some of these complications.”  

A federal election is due by May next year, which Dr Mulino says allows plenty of opportunity for inquiry report responses.

“It’s a well-timed and timely process. Depending on what recommendations they accept and which ones they don’t, there’s certainly a bunch of actions that could come out of this early next year, and beyond.”