Insurers will find it easier to communicate electronically with clients after the Senate last week passed the Insurance Contracts Amendment Bill, which gives greater certainty about information that can be sent over the internet.

The bill also gives the Australian Securities and Investments Commission greater power to intervene in insurance matters and makes violating the duty of utmost good faith a breach of the Insurance Contracts Act.

Financial Services Minister Bill Shorten says the bill makes the duty of disclosure easier for consumers to understand and comply with, particularly when renewing household insurance.

It follows the Cameron-Milne review of 2004, which found consumers often fail to understand some aspects of disclosure, such as the information insurers consider relevant to applications.

Insurance Council of Australia CEO Rob Whelan says the legislation will speed communications and let consumers obtain more information online via computers, tablets and smartphones.

“It will mean insurers can develop interactive product disclosure statements, so consumers can quickly navigate to the parts of their [statement] they want to read, while also allowing them to search documents quickly for important terms and definitions.”