New Zealand’s insurance industry will “impose higher standards on itself” and has set a “high benchmark for self-regulation” with its new Fair Insurance Code, according to Insurance Council of New Zealand (ICNZ) CEO Tim Grafton.

He says the code reflects “an increasingly customer-centric world” and commits ICNZ members to “higher standards of service in all their dealings”, not just claims.

The code promotes “enhanced, effective communication” with policyholders and requires insurers to “act reasonably” when faced with non-disclosure of relevant information.

Insurers must acknowledge receipt of a claim within five business days and make a decision about whether or not to accept it within 10 days.

With complex claims taking more than 10 days to settle, a communication protocol ensures consumers are kept fully informed.

Code breaches will be referred to a new independent Code Compliance Committee for investigation. The committee can impose sanctions ranging from fines to expulsion from ICNZ.

The number of breaches will be published “to add a further level of accountability”.

Consumers can lodge complaints with the ICNZ internal dispute resolution scheme. If not resolved within two months, they can take their case to an independent, external scheme.

“As a result of this code, consumers can say with confidence, ‘I know I’m going to get better service and there is proper recourse to rectify any deficiency,’ which puts us ahead of the wave,” Mr Grafton told insuranceNEWS.com.au.

The code addresses deficiencies that emerged after the Canterbury earthquakes, such as poor response times and inadequate information for consumers.

But Mr Grafton says the quakes were not the impetus for the tougher standards.

“Canterbury highlighted the gap between customer expectations and delivery, but if there had been no Canterbury there would have been a new code in any event. We review our code of practice every three years.”

The code will not apply until January 1 next year. Mr Grafton says this gives insurers time to put new systems and processes in place and conduct necessary staff training.