An updated Code of Practice is set to kick in tomorrow for the general insurance industry, ushering in a new era of strengthened consumer protections and stiff sanctions for non-compliance including penalties of up to $100,000 for significant breaches.

Other new features of the revamped code include independent enforcement through the Code Governance Committee, cost comparisons between new and previous policies on renewal notices, streamlined complaints processes and mandatory standards for claims investigators.

Code subscribers are also expected to have clear timeframes to respond to claims, complaints and information requests as well as provide better explanations of how cash settlements work.

Many enhancements aimed at helping vulnerable customers started a year ago, with implementation for the rest of the code pushed back until this year because of the pandemic disruption.

For significant breaches, subscribers can expect to pay a maximum $100,000 in community benefit payment.

“Australian households rely on their insurer to help them get back on their feet after a crisis or unexpected event, and so it’s essential there’s trust between insurers and their customers,” ICA CEO Andrew Hall said.

“The new Code of Practice for general insurance sets clear obligations for insurers with independent enforcement through the Code Governance Committee, who can impose tougher sanctions for breaches.

“It underscores the industry’s commitment to openness, fairness and honesty in all dealings with customers.

“The new code includes a range of customer-centric provisions, including stronger protections for customers in areas such as cost transparency, support for those experiencing vulnerability and financial hardship and a streamlined complaints process.”

ICA says it will run an information campaign in the coming months to raise awareness of the new code. It intends to apply for approval from the Australian Securities and Investments Commission for the code once the corporate regulator has updated the appropriate regulatory guide.

Click here for the code.