The Insurance Reference Services (IRS) claims database – which aimed to help insurers identify disclosure failures or fraud – has been shut down.

The IRS, established in 1991, enabled insurers to share claims data, but insureds could also pay for a report on their claims history.

insuranceNEWS.com.au understands insurers have gradually moved away from the system in recent years. The database was criticised for its accuracy levels by consumer groups in 2022.

“IRS members made the decision to wind up the operations ... as the most appropriate course of action given the small number of remaining members,” the Insurance Council of Australia (ICA) said. “IRS has always been independent of ICA and had its own autonomous board.” 

ICA says it will consult with members on developing a new fraud detection service.

“Given the growing risk of fraud in Australia, insurers agree that a modern and sophisticated ... insurance fraud detection service is required and, therefore, ICA is now engaging with its members, industry experts and technology suppliers to develop an industry-wide fraud detection and prevention solution. 

“An insurance fraud database is used in other countries, so in developing this solution ICA will look to the experience in those countries such as the United Kingdom, where the industry funds the Insurance Fraud Register.”

One insurer source told insuranceNEWS.com.au that now IRS is closed, and while the new system is being developed, insurers are unable to share claims data.

“I’d like to know how insurers are obtaining claims information now,” another broker source told insuranceNEWS.com.au.

But ICA says "there remains a capability for insurers to share claims data through the Insurance Fraud Bureau of Australia (IFBA) which is a working element of the ICA".

ICA says IFBA was established to help combat insurance fraud in all of its forms and works with police and other bodies to prosecute cases when criminal activity is identified. 

"The specific mandate of IFBA is to execute information collection, share and analyse insurance fraud information that assists insurance company action against insurance fraud," ICA said.

"It also informs community decision making and law enforcement investigations in order to reduce the incidence and impact of insurance fraud on honest policyholders."

ICA says it is expanding the capability of IFBA "as part of the development of an industry-wide solution with the establishment of a dedicated entity focused on the detection of systemic and organised insurance fraud across the Australian landscape.

"Initially focused on motor claims, it is anticipated that this new capability will expand into other product classes."