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ICA chief issues climate change warning

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Climate change could lead to parts of the country becoming uninsurable, Insurance Council of Australia (ICA) President Richard Enthoven has warned.

Mr Enthoven told last week’s National Insurance Brokers Association Convention on the Gold Coast that while climate change is politically sensitive, industry data “aligns with climate science”.

“Evidence abounds in support of claims our planet is warming because of increased carbon emissions,” he said.

“Changing weather systems may make certain regions more exposed to storm, flood or bushfire, thereby potentially making parts of Australia uninsurable.”

But Mr Enthoven says if mitigation measures are put in place “the uninsurable becomes insurable again”.

In his “state of the industry” speech, Mr Enthoven also gave insights into the revised General Insurance Code of Practice, which goes before the ICA board on October 31 for approval.

The final draft of the code, which has undergone a major revamp in the midst of the Hayne royal commission reforms, includes a $100,000 punishment for “significant breaches”.

“The new code will, for the first time, include a community benefit payable by members of up to $100,000 as a sanction for significant breaches – a strong message from the ICA board that industry self-regulation should have meaningful sanctions,” Mr Enthoven said.

He also says Australian Securities and Investments Commission approval will be sought for the code, which will focus on vulnerable consumers.

“[The code] includes important new provisions that address mental health and, importantly, a requirement for insurers to implement a domestic family violence policy,” he said.

The new code will become mandatory following board approval, and a 12-month transition period will start on January 1. The family violence requirement will have a six-month transition period.