Insurance premium funders have developed an inaugural industry code of practice that will strengthen disclosure obligations and make it easier for customers to compare products.

The Australian Finance Industry Association (AFIA) and members Hunter Premium Funding, IQumulate, BOQ Finance, Principal Finance, Attvest, Premium Funding, Elantis and Westpac have opened an eight-week consultation on the draft document.

AFIA says the sector has been proactive in developing the code as funders look to go “above and beyond” the law and voluntarily respond to standards set by the Hayne royal commission.

“We all understand that good conduct, disclosure and complaints handling standards are important to allow customers to consider the most suitable and cost-effective product for themselves and their businesses and to get things fixed if something goes wrong,” CEO Diane Tate said.

Under the code members will not enter into any conflicted remuneration arrangements “with anyone, including our intermediaries” and information about loan products will be provided clearly and in plain language.

The document also covers information privacy and security, standards for working with clients in financial difficulty and expectations for prompt and fair resolution of complaints.

A Code Compliance Committee, independent of AFIA and the premium funders, will be charged with monitoring, policing and dealing with potential non-compliance.

The group is aiming for the code to take effect next July, with reviews to be completed every three years, or earlier if required by the compliance committee.

The National Insurance Brokers Association (NIBA), which is soon to release an updated iteration of its own code of practice, has welcomed the release of the premium funders’ document.

“We will review the draft code and respond in due course,” CEO Dallas Booth said.

The draft is available here.