The Insurance Council of Australia (ICA) is willing to work on a definition for “actions of the sea” that could be legislated, but says differences in other home cover terms are likely less significant.

“From its own survey of documentation for home and contents insurance, the Insurance Council is uncertain that these differences are as detrimental for consumers as often maintained,” it says in a submission to the Australian Competition and Consumer Commission (ACCC).

The ACCC’s interim report on insurance in northern Australia includes a recommendation for standard definitions of certain events to help consumers understand and compare products.

ICA says the experience of claims staff, consumer advocates and complaints handling suggests problems could mostly be addressed through improved financial literacy.

But it says the logic behind definitions of “actions of the sea”, which vary in how they deal with tsunamis, storm surge or king tides, is not well understood.

“The Insurance Council is willing to work with interested stakeholders to develop a draft text that could be put to the Government for adoption in legislation,” it says.

“In relation to additional work, the Insurance Council is keen to hear from consumers, advocacy groups and other stakeholders on other terms that may be problematic.”

The submission supports moves to prevent “excessive broker commissions, but is against calls for a new fee model.

“Given the unique nature of general insurance and the market structures within which it is sold, the Insurance Council does not support a ban on commission-based remuneration arrangements.

“As an alternative to a ban on commission-based remuneration, the Insurance Council and many of its members are open to reforms that would ensure commissions are not excessive.

“This, together with greater transparency and disclosure by brokers, would mitigate any potential conflicts of interest.

“Further, inappropriate sales conduct is directly addressed by the new product design and distribution obligations reforms.”

In a separate submission to the ACCC, Suncorp calls for increased mitigation efforts and says the only way to sustainably reduce premiums in the north is to “reduce the physical impact of natural disasters”.

“Action by governments, communities and insurers must be taken now to address the increasing risk and impacts of natural disasters, and this should not wait until after the ACCC’s inquiry is complete,” it says.