Next week’s parliamentary hearings have the potential to be bruising encounters for the insurance industry, if initial comments by a leading MP are anything to go by.

As reported by insuranceNEWS.com.au yesterday, the House of Representatives Standing Committee on Economics will scrutinise the insurance sector on Tuesday and Wednesday as part of its ongoing review of the four major banks and other financial institutions.

Committee Chairman Tim Wilson MP said insurers must be held to account “given the widespread misconduct in the insurance sector identified by the Hayne Royal Commission”.

But insurance industry sources have challenged the accuracy of this statement.

“Insurers are committed to the transparency of this process, but Hayne did not find any systemic issues within general insurance,” one senior source told insuranceNEWS.com.au.

“Widespread misconduct was not a finding attributed to general insurance.”

Another source told insuranceNEWS.com.au he expects insurers' response to the COVID-19 outbreak to dominate the hearings, which could prove a useful information-gathering exercise for the politicians.

However, he fears some MPs “could go looking for a headline” without a proper understanding of how insurance works.

“There might be a bit of open season on trying to harangue insurers for not just covering every claim regardless of pandemic exclusions,” he said.

Industry sources also noted that the inquiry’s banks-focused hearings scheduled for June have been delayed until later in the year due to the four majors being “fully occupied in responding to the COVID-19 pandemic”. No such luxury has been afforded the general insurance industry.

And while the Insurance Council of Australia will be first to face the hearings on Tuesday morning, the Financial Services Council has not been required to attend.

It is expected that natural disasters will also feature strongly during the hearings, and a range of other issues could be discussed including progress made on Hayne royal commission recommendations.

Joining Mr Wilson on the committee is fellow Liberal Craig Kelly, who was labelled a “climate change denier” by global media after an appearance on UK television during the summer bushfire crisis.

The Deputy Chairman is Labor’s Andrew Leigh, while Greens leader Adam Bandt, Labor’s Anne Aly and Liberal Bridget Archer are among other committee members.

“Climate change will have to be an issue, with Craig Kelly on one side and Adam Bandt on the other,” one source said.