Just months ahead of the launch of the new General Insurance Code of Practice – the latest estimate says it’ll be June – the Australian Securities and Investments Commission (ASIC) has released a new policy statement on how it approves codes of conduct under the Corporations Act.

The regulator doesn’t have the power to mandate industry codes, but does act as a statutory body to approve voluntary codes.

The Insurance Council of Australia (ICA), which came in for some criticism from the regulator last year over its first draft code, is “working hard” to develop standards which meet the regulator’s rules.

Speaking at ICA’s NSW conference last week, Code Project Manager Heather Reid said a working party is developing a set of proposed standards that respond to the recommendations made by independent reviewer and former ASIC Chairman David Knott.

“In keeping with the need to be understandable to all consumers, we have removed the reliance on definitions of law to develop these standards. This means we have not used retail or wholesale definitions to determine the standards,” she said.

Under ASIC’s criteria, codes must be freestanding and written in plain English, while incorporating a “comprehensive body of rules – not a single issue guideline”. And it says all codes should be subject to mandatory reviews every three years.

Codes are also expected to be developed in consultation with key stakeholders, and enforceable against subscribers. It says codes should be independently administered, have monitored and enforced compliance, and be adequately promoted.

Ms Reid says ICA is also developing a communication plan to promote the new code, and has been in discussions with the Australian and New Zealand Institute of Insurance and Finance to “ensure training mechanisms are available for employees”.

“The code will become the catalyst for change by requiring its signatories to be more accountable for the service standards they proclaim.”