The Insurance Council of Australia aims to produce a revised code of practice by the middle of this year, after last week releasing a second-stage response to recommendations from an independent review and the parliamentary floods inquiry. 

A final report from the code review panel, released in December, said ICA should look to submit a revised code to the Australian Securities and Investments Commission for approval within six months and publish the final version by the end of this year, with a start date of July 1 next year.

“The industry acknowledges the timelines proposed by the independent review panel and will seek to work towards those,” an ICA spokesperson told insuranceNEWS.com.au.

“Key stakeholders such as consumer representatives and the code governance committee will be engaged throughout the process and, at this stage, we anticipate a period of public consultation.”

ICA’s action plan, which included both code review and the parliamentary floods inquiry recommendations, has drawn criticism from the review panel and consumer groups.

Of the 150 recommendations for insurers, ICA says 109 are agreed or agreed in principle, 28 require further investigation by industry, 10 require individual insurers to determine their practicality or appropriateness, and three related to pricing are not supported.

It has drawn fire for rejecting recommendations to ensure consumers do not pay more for choosing monthly premiums and that renewals are not more expensive than prices quoted for new customers.

The review panel and consumer groups have called for the code to be made contractually enforceable after ICA’s response “noted” rather than agreed with the proposal. They have also raised concerns over the number of recommendations listed for further investigation or left to individual insurers.

“There seems to be a lot of recommendations where they’ve hit the pause button, and I guess we’re just trying to say that’s really not good enough from our perspective,” independent review panel chair Helen Rowell told insuranceNEWS.com.au.  

The Australian Consumers Insurance Lobby has called for more action on issues including the use of expert reports, cash settlements and vulnerability protections.

Chair Tyrone Shandiman says insurers want ASIC to approve the code despite them failing to implement key recommendations, and ICA should reconsider its responses.

“How can ASIC endorse a code where insurers have ignored their own independent recommendations without a rigorous process to justify these decisions?” he said.

ACIL says self-regulation is failing and ICA decision-making on the independent review proposals “means insurers are essentially marking their own homework”.

ICA CEO Andrew Hall says the action plan includes themes for change that will guide the industry over the next couple of years and builds on work already started, with improving the customer experience central to this.

“We look forward to working with consumer advocates, regulators and the government to ensure our actions remain relevant and suitable in addressing the root causes of the problems identified,” he said.

See ANALYSIS.