The Insurance Council of Australia has published a charter setting out the industry’s principles and key actions for addressing extreme weather events and approaches to disaster preparation, response and recovery.

ICA says the charter stems from a recommendation in the Deloitte report on the industry’s response to 2022’s record floods. The peak body commissioned the consultancy to hold the review, and the findings were released last year.

The Deloitte report suggests the peak body should consider introducing a “baseline category” under its Insurance Event Management Plan to support industry and community readiness for extreme weather.

“The solution agreed to was to develop an Insurance Industry Extreme Weather and Disaster Charter and accompanying playbook,” an ICA spokesperson told insuranceNEWS.com.au.

“The playbook is still in development and will be a better practice guide for extreme weather and disaster response planning.”

ICA sought feedback from its members, its consumer advisory committee, the Australian Financial Complaints Authority, the corporate and prudential regulators, and the General Insurance Code Governance Committee for the charter.

“The intent of the charter is to provide an approach to solving challenges at scale and ... [not] to direct the delivery of actual financial services,” the spokesperson said.

“It does not interfere with legislative, regulatory or code requirements.”

The 10-page charter sets out the ICA’s process for declaring an insurance event and the types that can be declared: significant, catastrophe and extraordinary catastrophe.

It also explains the industry’s plan for responding to extreme weather events.

The section on accountability says the industry will publish quarterly reports outlining challenges, progress and projections for all active extreme weather and disaster responses.

It will also publish an annual review of the charter and the industry’s performance.

“The general insurance industry in Australia has a critical role in mitigating the financial impacts of extreme weather events and disasters while supporting recovery efforts,” the charter says. “Extreme weather events and disasters are special cases because often many thousands of customers are impacted all at once by the same event.”

Click here for the charter.