The Insurance Council of Australia (ICA) launched the revised General Insurance Code of Practice consultation draft this morning aiming to lift standards beyond the requirements of the Federal Government’s new regulatory regime and to make insurance processes, particularly claims, more transparent for consumers.

Unveiling the draft code in Sydney, Parliamentary Secretary to the Treasurer Ross Cameron commended the industry for responding positively to the Government’s stronger regulatory framework.

He said the revised code is intended to give insurance customers a stronger understanding of their rights. “The new draft code is an evolutionary step in steering the general insurance industry on a course of self-improvement through a framework of self-regulation.” 

The draft code proposes a number of improvements for the industry, particularly in relation to claims management. It aims to build a framework that encourages greater transparency and consumer understanding of insurance products.

The consultation draft can be downloaded at www.insurancecouncil.com.au. Submissions will be accepted up to September 8.

For the first time the code will extend beyond personal lines policies to commercial classes, and will involve intermediaries as well as insurers. But it isn’t intended to cover CTP, workers’ compensation or marine insurance.

ICA President Mike Wilkins told the official launching ceremony the public consultation period for the draft code is an important development for consumers. The industry’s commitment to both the existing 1994-model code and the development of the new draft code are “a demonstration of the industry’s drive to lift its standards”.

“The 20% reduction in complaints received by the independent Insurance Enquiries and Complaints (IEC) during 2003 is testimony to the benefits of industry improvements,” he said.

Australian Securities and Investments Commission approval of the new code will be sought after the public consultation period.  IEC will monitor compliance and sanctions may be imposed on insurers which fail to meet the code’s requirements.

National Insurance Brokers Association CEO Noel Pettersen says the fact that the revised code will be extended to include claims payments by insurance companies “should mean that insurers will be more effective and efficient in paying claims”. The new code is intended to apply to brokers acting under a binder to the insurer.

Shadow Minister for Financial Services Senator Stephen Conroy says he is particularly pleased that it proposes improvements to claims management procedures. “For most consumers, this is the most important aspect of the service that insurers provide.

“Labor also supports the proposal to expand the scope of the code to cover a wide class of commercial business including public liability and professional indemnity insurance,” he said.