New code of practice to kick in
The revised General Insurance Code of Practice takes effect on July 1.
Major changes include provisions to help consumers suffering financial hardship, establishment of an independent “code governance committee” and tighter timeframes to respond to claims.
All Insurance Council of Australia (ICA) members must be compliant, and other industry participants can subscribe to the code.
ICA expects at least 51 general insurers and 97 Lloyd’s Australia coverholders and claims administrators to have signed up by July 1.
CEO Rob Whelan told insuranceNEWS.com.au insurers have had a year to prepare, and no breaches have been reported so far.
Many ICA members are acting on hardship issues before the latest revision and are meeting timeframes to respond to claims and complaints that, now enshrined in the code, were introduced following the 2011 floods.
The 2012 version of the code let insurers opt out of some timeframes following a catastrophe declaration.
The code governance body replaces the code compliance committee and comprises three members: former senior public servant Lynelle Briggs, Legal Aid NSW Senior Solicitor Julie Maron and chairman Ian Berg, who retired as FM Global VP and operations manager Australia last year.
“A big difference is that the [new] code compliance body is completely separate from ICA and the industry,” Mr Whelan said.
The code governance committee can impose sanctions if breaches are not rectified and may order corrective advertising, or itself publish details of non-compliance.
It will receive reports of possible breaches from the Financial Ombudsman Service (FOS) and consumers, plus subscribers can self-report. FOS will conduct day-to-day monitoring work.
Mr Whelan says the code is more accessible for consumers after being rewritten in plain English to “strip out jargon”.
ICA has developed a separate code website, which insurers can link to on their own sites.