Treasurer Josh Frydenberg has called on the Insurance Council of Australia (ICA) to prioritise code of practice changes recommended by the Hayne royal commission.

“The royal commission has made recommendations for the general and life insurance industries including in relation to enforceable code provisions,” he says in a letter to ICA CEO Rob Whelan.

“I expect ICA and the general insurance industry to carefully consider and commence action to begin implementing those recommendations immediately.”

Commissioner Kenneth Hayne proposes amending legislation so parts of industry codes approved by the Australian Securities and Investments Commission are legally enforceable. He also calls on ICA to make changes so the governance committee can impose sanctions for breaches.

The Treasurer’s letter says ICA members should annually review remuneration to ensure it focuses not only on what front-line staff do but how they do it, while the Government expects financial services groups to assess their culture and governance and address any problems.

“Finally, I ask that you work with your members to take action and truly commit to restoring trust in the financial system,” Mr Frydenberg says.

“Only strong and decisive action of the kind that leads to lasting change will ensure the misconduct revealed by the royal commission is not repeated.”

Mr Frydenberg wants ICA to respond with a commitment to the matters raised, including when and how members will implement the recommendations.

ICA says it has already responded to the Treasurer’s letter.

“ICA will work in both the short and long term with its members to address the royal commission’s recommendations, to improve outcomes for consumers and set higher standards for corporate behaviour and culture,” spokesman Campbell Fuller told insuranceNEWS.com.au.

Mr Frydenberg sent a similar letter to Financial Services Council CEO Sally Loane.