Significant breaches of the General Insurance Code of Practice have risen 70% in the past financial year, partly reflecting pricing reviews, an Australian Financial Complaints Authority (AFCA) forum heard today.

A presentation by Code Compliance and Operations Manager Joanna Ifield shows individual significant breaches, which are self-reported to the compliance committee as they occur, jumped to 223 from 131. The increase was partly attributed to a focus on pricing by the Australian Securities and Investments Commission (ASIC).

“One of the factors driving this increase is a review being undertaken by ASIC,” Ms Ifield said. “In October last year ASIC called on general insurers to review their pricing systems and controls as a matter of priority to ensure customers get the full discounts they are promised.”

Ms Ifield says data for the 2021 financial year shows pricing was already a concern, with around 25% of significant breaches related to the obligation for subscribers to be fair, transparent, efficient and timely in their sales processes and services, with errors related to pricing dominating those breaches.

Over the past year the Code Governance Committee, which is supported by a secretariat within AFCA, opened a total of 169 new investigation case files overall and closed 152 matters. It opened 115 new significant breach files and closed 102.

AFCA figures released last month showed that general insurance complaints rose about 10% last financial year to 18,563, with delays in claims handling the top issue.

Lead Ombudsman Insurance Emma Curtis said today that insurers resolved 44% of complaints early at the registration and referral stage, which was down from 46% in the previous year.

“I encourage insurers to build on this to improve this figure,” she said. “We welcome early resolution at this stage, as long as the outcome is fair for both parties, because it is efficient and cost effective for firms and it helps take away some anxiety and uncertainty for complainants.”

The percentage of insurance complaints resolved by agreement also fell, dropping to 58% from 63%.

Ms Curtis encouraged insurers to engage with AFCA early, to ensure they have done everything they possibly can to resolve a complaint and to ensure if an dispute does go to AFCA that they have provided all the relevant documents.