The House of Representatives Social Policy and Legal Affairs Committee’s report into the insurance response to natural disasters has recommended that the Government give the Australian Securities and Investments Commission (ASIC) greater powers to regulate insurers.

The report – In the Wake of Disasters: Volume One: The operation of the insurance industry during disaster events – was released last week after a series of public hearings last year.

Among its 13 recommendations to improve the insurance industry’s response to disasters, the committee calls on the Government to empower ASIC to regulate claims-handling, settlements and disputes.

The report also recommends legislation to make the General Insurance Code of Practice compulsory by law for all general insurers.

Committee Chairman Graham Perrett says the industry has successfully argued for some exemptions to relevant legislation in the past.

“However, given the flaws exposed in the General Insurance Code of Practice as it currently stands amid a self-regulatory approach, these exemptions should be overturned and more stringent, mandatory obligations implemented.”

Insurance Council of Australia (ICA) CEO Rob Whelan says current dispute resolution processes have proved to be “robust and effective”, and further government and regulator intervention is “not necessary”.

The recommendations also cover the introduction of a standard definition of flood and changes to claims-handling policies and procedures in the code, many of which were among amendments recently announced by ICA.

“In early February the ICA board agreed to changes to the General Insurance Code of Practice that addresses the concerns of consumer groups relating to claims-handling timetables, external expert reports and a right to claim,” Mr Whelan said.

The council also criticised the Perrett committee report for failing to identify actions that governments should take to reduce the impact of natural disasters and improve the affordability of insurance.

ICA President and Wesfarmers Insurance MD Rob Scott says he’s pleased with how the industry has “already moved swiftly to drive key reforms such the common definition for flood, developing the key facts sheet and introducing changes to the General Insurance Code of Practice”.