Insurers should be required to respond to policyholders’ routine claim enquiries more quickly than under current rules, the National Insurance Brokers Association says.

An independent review of the General Insurance Code of Practice has asked whether time frames should be changed, including in a clause setting a 10-business-day deadline for responses.

“NIBA recommends reducing the time frame for responding to routine enquiries to five business days,” the association says in a submission. “This would more closely align with community expectations and reduce unnecessary stress on policyholders.”

The submission suggests the requirement in paragraph 70 to provide an update on a claim every 20 business days could be amended to better reflect information requirements.

It suggests changing the wording to “we will provide you with a meaningful update about the progress of your claim at least every 20 business days unless we have agreed on an alternative time period with you”.

Paragraph 70 is the most breached obligation in the code and the Insurance Council of Australia has sought changes in its review submission.

ICA has proposed 20-day progress updates until a claim decision is made, and subsequent rebuild or repair progress updates to be either event-based or every two months if there is no event-based progress. It has also suggested changes to allow for digital self-service progress updates.

In other areas, NIBA says external experts should have to provide their reports to insurers within 10 business days of completing assessments, and a clause that requires copies to be provided to claimants only upon request should be expanded.

“NIBA proposes an extension of this obligation to instances where a policyholder's claim is denied, or the insurer restricts liability based on the report’s information or the expert’s recommendation.

“This proactive approach ensures that policyholders have access to critical information influencing claim outcomes, thereby promoting transparency and accountability within the claims process.”

NIBA supports the inclusion of code provisions that encourage insurers to recognise consumer risk mitigation efforts, as the first step towards an industry-wide approach around household-level mitigation works.

The submission says the current approach of categorising insurance customers into retail or wholesale, in line with definitions in the Corporations Act, should be retained and it opposes adopting the Australian Financial Complaints Authority definition of an SME as an organisation with fewer than 100 employees.

“Altering a categorisation system used across all areas of general insurance may lead to confusion and inconsistency in the application of the code, potentially undermining its effectiveness in protecting consumer interests,” it says.

NIBA notes that parts 5, 6, 7, 8, 9 and 11 of the general insurance code apply only to retail clients, and the review panel “may wish to consider whether these restrictions remain appropriate”.

The Insurance Brokers Code Compliance Committee, in its review submission, notes that obligations in the document it oversees protect both retail and wholesale clients, except for section 6.1, which relates to the disclosure of remuneration.

It recommends the general insurance code apply to all products previously excluded and that, in line with expectations that financial services codes extend beyond the law, protections should extend to all insurance products. It also suggests there is value in adopting AFCA’s small business definition.

“While the typical small business may share similar insurance needs to its larger counterparts, it does not necessarily share the size, complexity, resources, capability and business acumen,” it says.

“Many small businesses operate on small budgets with limited resources and personnel. Generally, they lack the expertise and risk management capabilities of larger corporations. They are often family owned and run operations.”

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