The Insurance Council of Australia (ICA) wants further discussion with the Government on key facts sheets (KFS) before a model is released for consumer testing.

Its submission on the Government’s plan to introduce the sheets on home property policies makes it clear the council is wary about the risk of over-simplifying the products.

ICA says the KFS should not be a substitute for a product disclosure statement (PDS), and consumers will need to keep in mind the fact that a KFS will provide only a basic overview of the policy.

It is also concerned about “practical difficulties with the policy types classifications”, saying Treasury’s proposed three policy “types/classifications” should apply only to home building cover, but not contents cover.

Calling for the sheets to be better structured to “improve clarity and allow consumer consideration of optional cover where available”, ICA also points out problems with content and format.

A single statement regarding the uses and limits of the KFS is necessary, the council says. It stresses the need for wording stating that the KFS “is not a comprehensive summary of the policy coverage, conditions and exclusions” which may limit consumer cover.

ICA says a “how to use” statement is imperative, and should be printed in a prominent position at the top of the page.

It views wording as “critical” to the KFS to “prevent disputation with customers and avoid any potential allegations of misleading and deceptive conduct”.

A reference to flood is seen as essential.  

The council also supports the inclusion of a statement that clarifies the cooling-off period. There is still debate about whether this needs to be included in the KFS or whether the KFS should recommend that consumers refer to the PDS.

The submission says the KFS will increase compliance costs. ICA estimates the cost to companies of producing a KFS will be about $1.2 million a year.

It says the KFS should be available electronically through the insurers’ websites or by email. 

Treasury has so far received nine submissions on the KFS discussion paper. Despite the March 23 closing date, some submissions have only just been received.