The Motor Vehicle Insurance and Repair Industry (MVIRI) Code of Conduct is set for a “rewrite” and other updates in response to recommendations made in an independent review that was conducted last year.

The MVIRI Code Administration Committee (CAC) says it has finalised a brief for a rewrite of the code, in addition to formally seeking legal advice regarding governance options for external parties who will report back to the committee in early 2024.

Reviewer Michael Schaper, who submitted his report in May last year, made 15 recommendations. These include introducing sanctions for non-compliance and a “thorough” rewrite to address “vague” wordings aimed at improving governance and consumer outcomes.

Dr Schaper also proposed greater clarity in relation to artificial intelligence (AI), appointment of an independent code committee chair and closer engagement with regulators.

The voluntary code commenced in 2006 and is jointly overseen by the Insurance Council of Australia and Motor Trades Association of Australia.

“Dr Schaper’s review called for improvements to the Code which would see it simplified, while remaining legally rigorous. To this end, the CAC has sought input from external advisers,” MVIRI CAC Chair Stephen Jenkins said.

“The review also called for the appointment of an independent chair and deputy chair, as well as clarifying the committee’s governance and voting.

“It is prudent the committee is informed with sound legal advice to ensure reform of the code achieves the best possible outcomes for all industry participants.”

Mr Stephens told insuranceNEWS.com.au the finalised brief will be for a “suitably” qualified individual to re-write the current text of the code.

“Importantly, we are looking for simplicity and clarity in how the code operates to provide all industry participants with a clearer understanding of how the code functions and when they are able to rely upon the code in their dealings,” he said.

He says “in principle the CAC is working towards taking up each of the 15 recommendations” but adds that “for practical reasons the degree and extent of implementation of each recommendation will vary”.

“From the perspective of the CAC, the recommendations are very important,” Mr Jenkins said.

“Considering the challenges which the body repair industry faces, from technological to business sustainability, the recommendations provide a roadmap under the operation of the Code, to adapt and manage these changes and assist all participants within the ecosystem of the industry to be sustainable into the future.”

The CAC has met several times to progress the 15 recommendations since receiving the report in May last year.

Dr Schaper in his report said the Code review “comes at a time of significant change” for the industry. Since the last assessment in 2017, there have been a number of changes in dispute resolution availability, mandatory legislative regimes and new trends in the automotive repair sector such as use of AI and advent of other new technologies.

Motor vehicle repairs make up the largest proportion of insurance claims from Australian consumers. In the retail insurance line there were 1.76 million smash claims made in the 2020/21 financial year, representing 45% of the total 3.9 million claims made by consumers nationally.