Brought to you by:

MPs demand answers over travel policy disclosures

Facebook Twitter LinkedIn Google

Disclosures in travel insurance policies for exclusions triggered by the coronavirus pandemic came under fire at a parliamentary committee hearing today.

House of Representatives Standing Committee on Economics committee members have called on the Insurance Council of Australia (ICA) to provide information on the exclusions, when they came into effect, whether they name COVID-19, and when advice was displayed on websites.

Deputy Chairman Andrew Leigh questioned ICA executives on whether adequate advice was given to consumers about known-event exclusions, triggered in the last week of January, before the event was declared a pandemic by the World Health Organisation.

“This is a stage where the Prime Minister is still happy to go along and watch his favourite football game; this is a period in which Donald Trump is just calling it a little virus,” Mr Leigh said.

“And you are saying Australian mums and dads when booking overseas travel should have known this was a pandemic?”

ICA Head of Risk and Operations Karl Sullivan said about half of travel policies had blanket exclusions while the remainder had exclusions for known events that customers should be made aware of at the time of purchase.

“The disclosure regime would operate in a way that when somebody is purchasing a product they are made aware of the product’s terms and conditions,” he said.

“It would be expected that a known-event declaration that had been made and that was attached to the policy at the time of purchase would be available to be understood by the client at that time.”

Customers would then also have the opportunity not to go ahead with a policy during the cooling-off period, he said.

Mr Sullivan said about 1200 travel insurance complaints are with the Insurance Ombudsman, which has established a process to work through them rapidly.

Committee Chairman Tim Wilson asked if ICA could say everyone who was sold a product was made aware of the relevant pandemic exclusion at that time.

“That is a matter that will be explored through the complaints process,” Mr Sullivan said.

ICA and the Code Governance Committee were also questioned today over a sharp rise in reported code breaches last financial year.

The committee is scrutinising the industry as part of its ongoing inquiry into the four major banks and other financial institutions.