The Financial Rights Legal Centre (FRLC) has proposed governments and the insurance sector develop automated pre-filling of driving records and claims histories on policy applications to prevent inadvertent disclosure failings.

The group says Consumer Data Right reforms, introduced in banking ahead of other sectors, could facilitate changes to prevent people having claims denied due to lack of disclosure.

An FRLC report released last week, Automating General Insurance Disclosure, says information pre-filling is available in the UK through the MyLicence scheme and an Australian version should be developed.

Australian Financial Complaints Authority (AFCA) Lead Ombudsman Emma Curtis says disclosure is an important issue for consumers and insurers.

“There can be inadvertent non-disclosure by policyholders at both policy inception and at renewal. It is an issue that we do see in our complaints,” she told insuranceNEWS.com.au. “The question of whether the recommendations in the FRLC’s report should be acted on is a matter for government and industry.”

FRLC examined 186 AFCA decisions based on non-disclosure disputes and 190 FRLC cases from 2018 to last year.

The report says Auto & General, Suncorp, Hollard and Allianz accounted for around 80% of the non-disclosure AFCA disputes last year and recommends those firms examine their quoting, sales and claims assessment processes.

Allianz says it would welcome the ability to obtain automated driving penalty information from state transport department databases, to assist in situations highlighted in the FRLC report.

“Ultimately, however, accurate and honest disclosure is the responsibility of policyholders, which has been borne out by individual AFCA decisions, as well as by the large proportion of disclosure-related AFCA determinations found in favour of insurers,” Chief Corporate Affairs Officer Nicholas Scofield told insuranceNEWS.com.au.

A change in the duty of disclosure that only requires customers to take “reasonable care” not to make a misrepresentation will assist people who may make otherwise inadvertent or innocent errors or omissions, he says

A Hollard spokesman says the insurer will take time over coming weeks, to review the FRLC report in detail so any potential implications for policyholders can be appropriately considered.

The Insurance Council of Australia (ICA) says the “reasonable care” change will assist consumers while individual policy holders can also access a personal claims report via the Insurance Reference Services (IRS) website for a service fee.

IRS is a not-for-profit established by insurers to manage a claims history database for its members, assisting with claims management and investigation, loss recovery, fraud detection and risk underwriting.

FRLC says the “reasonable care” reform will not fully address the disclosure issues, given that “if people don’t know the right answer they cannot provide it”, while IRS data also isn’t a solution.