ICA flood decision disappoints brokers, consumers
Brokers and consumer law advocates say they’re disappointed by the Insurance Council of Australia’s (ICA) decision not to revise its common flood definition after it was rejected last week.
And the National Insurance Brokers Association (NIBA) has offered to work with ICA and consumer groups to develop a more acceptable definition.
As insuranceNEWS.com.au reported in its Breaking News bulletin on Thursday, the Australian Competition and Consumer Commission (ACCC) rejected the proposed common flood definition on the grounds that it was unlikely to deliver benefits to the public that could balance out any anti-competitive aspects.
The ACCC was swayed by a submission from consumer law advocates who argued the broad scope of the definition was likely to provide a template to insurers to exclude cover.
ICA said shortly after the decision was announced last week that “no further work will be undertaken on the standard definition at this time”.
Consumer Action Law Centre Director of Policy and Campaigns Nicole Rich told insuranceNEWS.com.au she is disappointed at ICA’s response because an adequate definition could be of value to consumers.
“We’d welcome consultation with ICA on a fairer and more appropriate proposal,” she said. “They don’t currently have the ability to run proper consultation with the community, and their decision [not to revise the proposal] confirms my opinion.”
NIBA CEO Noel Pettersen told insuranceNEWS.com.au his association is disappointed ICA was not able to amend its proposal to gain wider acceptance.
He says NIBA is willing to work with ICA and consumer groups to develop a more acceptable common flood definition.
“I absolutely agree that we need to simplify the cover and a simple water definition is the way to go,” he said. “But given that Zurich has decided to provide flood cover using its own definition of flood, I doubt that the ACCC’s decision will really cause the industry much discomfort.”
Also see ANALYSIS
And the National Insurance Brokers Association (NIBA) has offered to work with ICA and consumer groups to develop a more acceptable definition.
As insuranceNEWS.com.au reported in its Breaking News bulletin on Thursday, the Australian Competition and Consumer Commission (ACCC) rejected the proposed common flood definition on the grounds that it was unlikely to deliver benefits to the public that could balance out any anti-competitive aspects.
The ACCC was swayed by a submission from consumer law advocates who argued the broad scope of the definition was likely to provide a template to insurers to exclude cover.
ICA said shortly after the decision was announced last week that “no further work will be undertaken on the standard definition at this time”.
Consumer Action Law Centre Director of Policy and Campaigns Nicole Rich told insuranceNEWS.com.au she is disappointed at ICA’s response because an adequate definition could be of value to consumers.
“We’d welcome consultation with ICA on a fairer and more appropriate proposal,” she said. “They don’t currently have the ability to run proper consultation with the community, and their decision [not to revise the proposal] confirms my opinion.”
NIBA CEO Noel Pettersen told insuranceNEWS.com.au his association is disappointed ICA was not able to amend its proposal to gain wider acceptance.
He says NIBA is willing to work with ICA and consumer groups to develop a more acceptable common flood definition.
“I absolutely agree that we need to simplify the cover and a simple water definition is the way to go,” he said. “But given that Zurich has decided to provide flood cover using its own definition of flood, I doubt that the ACCC’s decision will really cause the industry much discomfort.”
Also see ANALYSIS