Terms of reference for the federal parliamentary inquiry into insurer responses to last year’s floods are comprehensive, the Insurance Council of Australia (ICA) says following the release of details last week. 

The inquiry will be undertaken by the Standing Committee on Economics, which will deliver its final report during the third quarter of next year, Assistant Treasurer Stephen Jones says. Plans for the inquiry were initially announced in June. 

Claims handling, internal dispute resolution, affordability, types of contracts offered, communication, land-use planning and mitigation will be among areas examined, the terms of reference say, while the inquiry will take into consideration findings from other reports such as the ICA-requested Deloitte external review. 

“The terms of reference are comprehensive, and it is pleasing to see they acknowledge the work the industry is already undertaking to review and improve its performance in response to floods through an external review, which was commissioned by the ICA in April this year,” a spokesperson said. 

“The terms of reference also include land use planning and disaster mitigation, which are critical to improving insurance affordability in the long-term.” 

ICA says it welcomes any review that supports the ability of insurers to improve how they carry out their crucial function and assist communities to get back on their feet following a disaster. 

“We strongly support the Albanese Government’s focus on improving the resilience of Australian homes and communities against extreme weather events, but more needs to be done to ensure insurance remains sustainable as the climate worsens,” the spokesperson said. 

The Australian Financial Complaints Authority (AFCA), which has highlighted the number of disputes it receives around claims handling, has also welcomed the inquiry. 

“We have had concerns for over a year now about the number of complaints that are coming to AFCA about general insurance claims, including complaints about delays, and we have raised these concerns with insurers,” Chief Ombudsman David Locke tells insuranceNEWS.com.au.  

“We will review the terms of reference and consider how best to engage with the inquiry. We would be pleased to contribute insights from our experience as an ombudsman service and from our complaints data.” 

Mr Locke says the inquiry is an opportunity for all parties to better understand the issues and to find ways forward for the benefit of both consumers and insurers. 

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