The first insurance premium funding (IPF) code of practice will take effect from the start of October following its launch this month.

The Australian Finance Industry Association (AFIA) and insurance premium funding working group members have released the document after extensive consultation, and it has been designed to work alongside other codes, in particular the National Insurance Brokers Association updated code.

“This is an important milestone,” AFIA CEO Diane Tate said. “The Financial Services Royal Commission made it clear it’s not just what financial institutions do that is important, but how they do it, and firms are now required to embed a consumer-centric approach.”

Compliance will be overseen by an independent committee chaired by Vicki Mullen, who has more than 25 years’ experience in public policy and financial services, including as an ombudsman with the Australian Financial Complaints Authority (AFCA).

“The code is an important tool that protects businesses - especially small businesses - while supporting competition and innovation,” Ms Mullen said.

The code compliance committee also comprises former National Insurance Brokers Association CEO Dallas Booth and legal practitioner Ed Martin.

AFIA members Arteva, Attvest, BOQ Finance, Clearmatch, Elantis, Hunter Premium Funding and IQumulate were involved in the code’s development.

The document commits signatories to increased transparency and disclosure on pricing and promotes continuous improvement in customer service and a culture of professionalism.

Customers must have access to internal and external dispute resolution, including through AFCA, while signatories must provide hardship assistance, and ensure arrangements require brokers to act in the best interests of customers in the distribution of IPF products.

“The new IPF Code of Practice is an example of the finance industry proactively adopting industry standards that go above and beyond what is required by the law,” Ms Tate said.

AFIA anticipates Clearmatch, Elantis, Hunter Premium Funding and IQumulate to commence the accreditation process before the effective date, with Arteva, Attvest and BOQ Finance to follow.

The code is available here.