It’s taken a long time, but the new General Insurance Code of Practice is here at last. Following a lengthy consultation process, the Insurance Council of Australia (ICA) has released its comprehensive overhaul of the 11-year-old General Insurance Code of Practice.

ICA has spruiked the new code as something that will improve claims management standards, cover all types of general insurance including personal and commercial lines and also provide a better response to natural disasters.

The code is compulsory for ICA’s 56 member groups and has been developed through close consultation with the insurance industry and consumer and business representatives.

The new document won’t cover workers’ compensation, CTP, medical indemnity and marine insurance because they all have their own set of laws.

ICA President Michael Hawker says the code “represents a real bonus for consumers”.

Perhaps responding to the critics – including the Australian Securities and Investments Commission, which complained about the draft’s consumer-unfriendly approach  – Mr Hawker said the code is “written in plain language that everyone can understand and not only sets concrete standards that customers will be able to expect of their insurer, but encourages insurers to exceed them”.

“They want to know what they can expect when a claim happens, when they will hear from their insurer and that their claim will be dealt with fairly, honestly and efficiently. This is all set out in the code.”

The Federal Government has welcomed the code, with Parliamentary Secretary to the Treasurer Chris Pearce congratulating the industry “for listening to the Australian public and taking this step to create greater transparency, improved customer service and clearer information for policyholders”.

“This code sets minimum service standards which complement the world-class regulatory system now governing Australia’s financial services sector,” he said. “This code is also an insurance industry world-first, as it is the first time that such a code has addressed the needs of both individual consumers and business customers.”

The code does indeed give an agreed timeframe for handling claims or responding to complaints – 10 business days. It also considers financial hardship as a result of loss or damage, and guarantees insurers will respond by fast-tracking claims or making advance payments to alleviate immediate hardship.

Responding to criticisms of the industry in the wake of the Canberra bushfires, ICA says the new code recognises that when natural disasters strike the insurance industry needs to be flexible and understanding in helping affected communities.

Insurers will be implementing the code over the next 12 months. During this time the existing code of practice will continue to support consumers.