The Federal Opposition has criticised the Government for not including a flood definition in the Insurance Contracts Amendment Bill.

During its second reading in the House of Representatives last week, Shadow Consumer Affairs Minister Bruce Billson said the promise of a definition in future regulations is “not good enough”.

He said an exposure draft of the regulations regarding the standard definition of floods has been issued, but the final definition is yet to be released.

“There can be no parliamentary scrutiny of the definition,” Mr Billson said. “Members of the House voting on this bill are being asked to take it on trust that the definition will be adequate.”

He said MPs who represent flood-prone constituencies couldn’t provide absolute assurance that the Government has got it right.

“The absence of a definition creates more uncertainty,” Mr Billson said. “This is counter to the intention of the bill, which is to reduce confusion and to ensure policyholders have an understanding of what they are covered for and, perhaps even more importantly, what they are not covered for.

“Instead of providing certainty, the Government has created uncertainty.”

Labor MP Shayne Neumann told the House of Representatives he wants to see stronger monitoring of the insurance industry by the regulator.

“I urge the Government to have a strong cop on the beat in relation to the insurance industry,” he said.

“It should be not just a licensing authority, but a monitoring authority with tough sanctions and tough enforcement to make sure that insurance companies honour their code of practice.

“Sadly, that is not the case.”

Mr Neumann says the General Insurance Code of Practice needs to be complied with in flood situations.

“It needs to be mandatory and it needs to be across the whole industry,” he said.

“We welcome the moves by the Insurance Council of Australia to take some small steps along that way, but it is simply not good enough.”

The bill has now passed its second reading with Coalition support.