The General Insurance Code Governance Committee says code subscribers reported 41,768 breaches during the 2020/21 financial year as the industry adjusts to new requirements in the latest version of the code.

The figure is an increase of 27.1% on the previous year, the committee’s annual report, which is released today, shows.

It’s the fifth consecutive rise in reported breaches and the committee says it is “focused on seeing that figure reduce significantly over coming years” through improvements in governance and compliance frameworks.

“While it’s encouraging to see code subscribers embrace self-reporting, it’s important that self-reporting on its own is not seen as the goal and the committee will be working closely with subscribers to support a rapid improvement in these numbers going forward,” committee Chair Veronique Ingram said.

“We look forward to seeing subscribers pay closer attention to identifying the root causes of these breaches, as well as improving their processes and procedures, to ensure we see these numbers start to come down in future reports.”

Four sections of the code account for 98% of the breaches reported by code subscribers this year:

- 26,152 breaches of Section 7 (Claims), up 56%

- 6821 breaches of Section 10 (Complaints and Disputes), down 17%

- 4324 breaches of Section 14 (Access to Information), up 22%

- 3693 breaches of Section 4 (Buying Insurance), down 7%.

Subscribers reported a total of 131 individual significant breaches in 2020/21, following 112 reported in 2019/20.

And during the year there were 64 breaches of the code identified through the committee’s own investigations. This represents a decrease of 63% on the previous year.

The majority of the 2020 Code came into effect on July 1 last year, but aspects giving consumer protections to vulnerable consumers and those experiencing financial hardship came into effect during the 2020/21 financial year.

The provisions included Paragraph 95, which required code subscribers to have a publicly available family violence policy on their websites by 1 July 2020, and Parts 9 (supporting customers experiencing vulnerability) and 10 (financial hardship) which came into effect on January 1 2021.

“The new obligations for supporting customers experiencing vulnerability and the enhanced obligations for financial hardship were among the most important changes in the 2020 code, and they can make a fundamental difference to the lives of consumers,” Ms Ingram says in the report.

“The committee acknowledges that the majority of code subscribers were responsive in delivering these important changes.

“However, given the long lead time and the heightened vulnerability of consumers caused by the Covid-19 pandemic, I must note the committee’s disappointment that a small number of Code subscribers failed to meet the code implementation deadlines.”

Click here to see the full report.