Home / Daily / Industry shoots down calls for national insurance monitor
30 June 2020
The Insurance Council of Australia (ICA) has rejected calls from consumer advocates for a national pricing watchdog to stop insurers from overcharging customers.
ICA spokesman Campbell Fuller says “no evidence that substantiates allegations of price gouging” has been provided to the industry, dismissing the advocates’ claims that the closure today of the NSW Emergency Services Levy (ESL) Insurance Monitor’s office will leave a void in consumer protection.
“The ICA rejects claims that the ESL Monitor was necessary to prevent price gouging,” Mr Fuller told insuranceNEWS.com.au today.
“Some insurers self-reported minor over-collection of a complex and variable tax on customers, and the ICA notes that many insurers have also significantly under-collected the ESL.”
Mr Fuller says the industry is already one of the most heavily regulated in the country, having to comply with the Australian Securities and Investments Commission, the Australian Prudential Regulation Authority, the Australian Competition and Consumer Commission as well as the General Insurance Code of Practice.
The NSW Independent Pricing and Regulatory Tribunal and similar bodies in other states and territories also provide additional layers of protection for insurance customers, he says.
But Consumer Law Action Centre, Choice and Financial Rights Legal Centre - which are leading the latest pressure campaign against the industry – insist otherwise, as they urge Canberra to make it a “national priority” to set up a federal pricing monitor ahead of the next bushfire season.
“Even though the Monitor only operated in NSW, its research, investigations and publications improved insurance price transparency across the whole country,” Consumer Action Law Centre CEO Gerard Brody said.
“The impact and findings of the NSW Monitor demonstrate the clear need for this kind of oversight across the insurance industry. Australians are tired of insurance rip offs, and a monitor could help to ensure more transparent and fair pricing.
“With people facing rising and unaffordable home insurance premiums following Black Summer, an independent price monitor is a national priority.”
Work done by the NSW Monitor has yielded important findings, the advocates say, such as pricing trends data and the so-called “loyalty tax” that penalises consumers with higher premiums when they choose to stay with the same insurer year after year.
“The closure of the Monitor is a loss of independent and impartial oversight of insurance pricing, which leaves insurance customers in the dark,” Mr Brody said.
As previously announced, the office of the Monitor is closing today due to the repeal of the Emergency Services Levy Insurance Monitor Act 2016.
The office was set up in June 2016 to make sure insurers passed on savings to customers during ESL reform, but the reform was controversially abandoned at the last minute in 2017.