The board of the Insurance Council of Australia (ICA) has approved revisions to the General Insurance Code of Practice, following the political flak it copped over claims handling during last year’s catastrophes.

One of the key changes is to timeframes for claims handling, including during declared catastrophe events.

Under the revised code, in the event of “exceptional circumstances” such as declared natural disasters or where fraud is suspected, a claimant must now be notified of the insurer’s decision to accept or deny a claim within 12 months.

Previously there were no timeframes set for claims decision notification for “exceptional circumstances”.

For all other claims, the provision to notify of acceptance or denial of a claim within 10 business days of receipt of the claim remains, providing all necessary information is lodged and no further assessment or investigation is required.

Should further investigation, information or assessment be required, a new timeframe has been added. In those cases the insurer is now required to notify a claimant of its decision to accept or deny a claim within four months of lodgement.

In order to meet these deadlines, a new provision states that when external experts are involved in the claims process they must provide their final report to the insurer within 12 weeks.

Another key change to the code means that when contacted with questions about policy coverage, insurers will also now be required to ask customers whether they would like to lodge a claim, and not discourage them from lodging a claim even if it is deemed as unlikely to be accepted.

ICA President Rob Scott says some of the code revisions “stem from the experiences of the 2011 storm season, while others have been developed over the past two years following extensive consultation with consumer groups and the industry”.

The updates take effect for claims received on or after July 1 this year, and for insurance contracts written from that date.

The ICA board has also agreed to bring forward the next independent review of the code from May next year to June this year.

Mr Scott says that review will “consider the insurance-related outcomes of the government inquiries currently being undertaken”.

An ICA spokesman told insuranceNEWS.com.au the ICA board will soon begin the selection process to appoint the independent reviewer.

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