The General Insurance Code of Practice will be a crucial tool in helping the industry embed Hayne royal commission reforms, the Insurance Council of Australia (ICA) says.

The code is being reviewed following “the most extensive and inclusive consultation process” and should be finalised and ready for implementation by early next year.

CEO Rob Whelan told last week’s 10th anniversary Australian Insurance Law Association (AILA) Young Professionals Luminaries Dinner in Sydney the Hayne reforms will stretch the industry “to its limits” and create a “seismic shift” in the way it operates.

Mr Whelan lists planned reforms in product and distribution obligations, claims as a financial service, unfair contract terms, anti-hawking provisions, and sanctions and enforceability in codes.

“Any one of these initiatives in isolation would be a challenge to implement. The combined or aggregate effect of all these changes simultaneously is a whole different prospect."

But he says the industry “has at its disposal a tool that can assist with the transformation – the General Insurance Code of Practice”.

“ICA and its member companies have toiled long and hard over the past two years to craft a revised Code of Practice that will go some way to defining the path forward,” he said.

“The code looks to respond to an environment where some of our customers may be suffering various forms of vulnerability – domestic abuse; mental illness; financial stress.

“It also looks to address the key criticism by the royal commission – specifically compliance and enforcement through the role and powers of the Code Governance Committee and ultimately the Corporations Act.

“The overarching intention of the code has always been to provide a living document that goes beyond the law, continuously improving the industry’s response to the ever-changing needs of customers and the community.”