The industry response to a key recommendation in the General Insurance Code of Practice review is a “major disappointment”, a consumer group says.

The Insurance Council of Australia (ICA) released lawyer Ian Enright’s review on August 2. Many of the 60 recommendations concern the formation of an independent “code governance body”.

But ICA says its members “believe it is important for [the council] to retain the responsibility for developing industry policy, including code content”.

Insurance Law Service Principal Solicitor Katherine Lane says if the code governance body is not implemented, many other recommendations will fall.

“It is the crux and cornerstone of the whole review,” she told insuranceNEWS.com.au. “The code governance body is something the Insurance Law Service would support.

“The main purpose of the code is to look after consumers, and independence makes such a big difference.

“Good governance would, over time, lead to better outcomes for consumers. That is why it is such a major disappointment that this part of the report appears to not be acceptable to ICA.

“The question is, what to do from here? It is a very difficult situation.”

ICA will produce a revised draft code by October. Ms Lane says governance must be addressed in some way, because the current structure does not meet Australian Securities and Investments Commission guidelines.

She says she is disappointed with the review in general.

“A lot of our submissions were not really adopted. We put a huge effort into financial hardship and that seems to have gone backwards, if anything. I think more consultation is required.”

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