Consumer advocate Choice has today called for an end to self-administered industry codes in the financial services industry, saying it wants the Australian Securities and Investments Commission (ASIC) in charge.

But the Insurance Council of Australia (ICA) swiftly rejected the suggestion, arguing the system has allowed the General Insurance Code of Practice to effectively and quickly respond to issues.

Tailor-made provisions for specific customer needs, improving services above legal requirements and setting behavioural standards are the other benefits of a self-regulating regime, ICA says.

It adds the voluntary code did not draw “significant criticism” in the Hayne royal commission’s final report.

“The Insurance Council of Australia believes the industry’s code of practice should remain in the hands of the industry,” spokesman Campbell Fuller told insuranceNEWS.com.au.

A review of the code is under way and Mr Campbell says ICA will work to ensure it “must preserve the benefits of self-regulation and seek to enhance consumer outcomes by simplifying, and not complicating, the framework within which industry codes operate.”

“[ICA] is seeking to ensure the updated code takes into account the key recommendations of the Hayne royal commission,” he said.

ICA has made a submission to a Treasury consultation on making parts of industry codes enforceable by law, as recommended by the Hayne royal commission’s final report.

Choice and the Superannuation Consumers’ Centre, in a joint submission, are adamant industry codes have failed to protect financial services customers.

“The scandals of the [royal commission] mean we must change how financial services industry codes work in Australia,” Choice Policy Adviser Patrick Veyret said.

“It’s clear the industry cannot be trusted to write their own codes. We need to kill off useless codes and give ASIC real power to hold the finance industry to account.”