Insurance premium funders expect the industry’s first code of practice will take effect from the middle of next year following a consultation process.

A draft code has been developed by The Australian Finance Industry Association (AFIA) and members Hunter Premium Funding, IQumulate, BOQ Finance, Principal Finance, Attvest, Premium Funding, Elantis and Westpac.

“AFIA and its insurance premium funder members have developed this code proactively, looking for it to go above and beyond the law,” association CEO Diane Tate said.

Under the code members will not enter into any conflicted remuneration arrangements, and information about products will be provided clearly and in plain language.

The document covers information privacy and security, standards for working with clients in financial difficulty and expectations for prompt and fair resolution of complaints.

A code compliance committee, independent of AFIA and the premium funders, will be charged with monitoring, policing and dealing with potential non-compliance.

“We all understand that good conduct, disclosure and complaints handling standards are important to allow customers to consider the most suitable and cost-effective product for themselves and their businesses and to get things fixed if something goes wrong,” Ms Tate said.

The group is aiming for the code to take effect next July, subject to the consultation process, with reviews to be completed every three years, or earlier if required by the compliance committee.

An eight-week consultation opened last week, with the draft code available here.