A consumer group says the Insurance Council of Australia’s recently released best-practice expert report standard does not go far enough to protect claimants – but the ICA has dismissed the concerns as “unfounded”. 

The Australian Consumers Insurance Lobby says that while the standard “governs how insurers use expert reports”, it is “alarmed that no clear standards are imposed on the experts themselves regarding the production of their reports or the evidence they provide”. 

Section 2 of the standard states that “insurers should ensure” that reports provide a statement of objectivity from the expert, the evidence relied upon, and clear and cogent reasoning supporting the opinion, plus other requirements. 

“The point is, yes, it’s good that insurers are looking at these things, but please let’s make this the standard the experts themselves must be bound by,” lobby chair Tyrone Shandiman told insuranceNEWS.com.au today. 

“If they are going to have those standards for insurers around evidence, around appropriate investigation … why isn’t it applying to the experts? That’s what we are saying. The problem with the expert report issue is the quality of the reports are bad.” 

But ICA says section 2 does detail the way the report should be written, how the report is formatted and its readability. It also specifies the sort of evidence that should and shouldn’t be included, including instructing experts to disregard irrelevant or incorrect information, relying only on facts or assumptions that have been clearly substantiated, and providing clear and cogent reasoning to support any opinion. 

“ACIL’s concerns are unfounded,” a spokesperson for ICA told insuranceNEWS.com.au. “For example, the standard does set standards for experts as contractors of insurers, including regarding the production of their reports and the evidence they provide.” 

ACIL also flags concerns that insurers could “unduly influence expert opinions and their impartiality”. 

But the ICA spokesperson says the standard “clearly sets out that insurers ‘should instruct experts that any findings must be based on evidence in responding to the instructions and questions which may support an insurer’s decision to accept or decline a claim’ and ‘provide a statement of objectivity from the expert’.” 

Section 2 of the standard sets out the format of the expert report, ICA says, listing 11 conditions that insurers have agreed to adopt when they engage opinions from hydrologists and other specialist tradespeople to help determine a claim. 

Mr Shandiman says the wording in section 2 is “definitely not good enough. The problem is it doesn’t govern how experts produce reports.” 

ICA released the standard in August after concerns over the use of expert reports in claims assessments from the 2022 record-breaking floods were discussed during the federal inquiry into insurers’ handling of the catastrophes. 

The ICA spokesperson says many of ACIL’s further claims are not supported by a reading of the standard, or misunderstand that the standard governs how insurers interact with experts, not the professional standards of experts such as hydrologists, engineers and builders themselves, who have their own standards to abide by. 

“If ACIL has evidence that insurers do not appear to have taken any steps to implement the new standard in the less than two months since its release, it should provide it, not engage in vague and unsupported assertions,” the spokesperson said.   

“ICA is happy to work through these issues with stakeholders, but any engagement in this space should be based on a factual and proper understanding of the relevant material and supported by clear evidence.”