The insurance industry is questioning Federal Government plans to extend the controversial key facts sheet regime beyond home insurance policies.

Treasury’s review of product disclosure regimes for general insurance – as recommended by a Senate inquiry – is continuing, but a progress report is contained in a Treasury background paper submitted to the Hayne royal commission.

The paper says Treasury will consider “the effectiveness of the key facts sheet as a means of product disclosure in improving consumer understanding of home building and home contents policies, and the merit of extending the use of key facts sheets to other forms of general insurance”.

Other reforms being considered include requiring insurers to disclose the previous year’s premium on renewal notices and amending the Corporations Act to provide component pricing of premiums to policyholders.

Treasury will review disclosure requirements for standard cover and consider enhancing comparability of insurance products through standardising definitions for key terms.

The Insurance Council of Australia (ICA) says the Treasury review covers a number of issues that the industry is already tackling. 

“This includes the incorporation of best-practice guidance in the general insurance code of practice on effective disclosure and a new obligation in the code to disclose the previous year’s premium at renewal,” an ICA spokesman told insuranceNEWS.com.au.

“The Insurance Council is also exploring with members options to assist consumers to compare policies. ICA is supportive of a comprehensive review of the effectiveness of the key facts sheet as a tool to help consumers compare policies.”

National Insurance Brokers Association CEO Dallas Booth is more blunt, saying any extension of the key facts sheet regime would be a mistake.

“There is overwhelming evidence that the product disclosure statement and key facts sheet process does not work,” he told insuranceNEWS.com.au.

“We do not need more key facts sheets.”