Be the Change You Seek – Your Essential Guide to the 2018 Review of the General Insurance Code of Practice Final Report

Key Points
  • On 26 June 2018, the Insurance Council of Australia released its final report regarding its review of the General Insurance Code of Practice (“the Final Report”).
  • The recommendations in the Final Report are to be incorporated into an updated General Insurance Code of Practice (“the Code of Practice”), which is currently in development.
  • Prior to the updated Code of Practice being released, it is imperative that general insurers properly inform themselves of these changes and start planning to implement amendments to their policies and procedures to ensure compliance.
  • The updated Code of Practice is anticipated to be released no later than November 2018, albeit that there will likely be a transition period with respect to the application of some provisions of the updated Code.

On 26 June 2018, the Insurance Council of Australia (“ICA”) released its Review of the General Insurance Code of Practice final report (“the Final Report”).
 
The ICA review of the Code of Practice commenced in 2017, at the request of the ICA’s board and after a period of consultation with stakeholders (which included the insurance industry as well as regulators and consumer and community organisations).
 
By way of brief and non-exhaustive summary, the Final Report includes the following recommendations:
  1. the Code of Practice be amended to include principles or guidelines with respect to consumers experiencing vulnerability, which would include:
    1. commitments concerning accommodating the needs of consumers experiencing vulnerability where they tell their insurer they need particular support or assistance; and
    2. a requirement for staff to be trained to help identify consumers experiencing vulnerability and how to appropriately engage with these consumers;
  2. the inclusion of enhanced protections for consumers experiencing financial hardship, which would include:
    1. amendments to the current provision of the Code of Practice concerning financial hardship so that it clearly applies to situations where a customer cannot pay their excess;
    2. requirements that insurers have internal policies and train relevant employees and agent debt collectors with respect to their obligations regarding the financial hardship provisions of the Code; and
    3. an obligation for reasonable requests to pay a debt in full in instalments not to be refused;
  3. a requirement that insurers have a family violence policy in place;
  4. the inclusion of best practice guidelines on mental health in the Code of Practice;
  5. the inclusion of mandatory standards on the use of investigators in the Code of Practice;
  6. a requirement that the insurer provide an insurance claimant with an overview of the claims process at the outset of this process, including any applicable excesses and waiting periods;
  7. a requirement that insurers only ask for relevant information relating to a claim, and explain to the insured why the information is relevant, noting that requests should be made early and, if possible, in one request;
  8. where the insurer’s appointed repairer conducts a faulty or poor repair, a requirement for insurers to cover the reasonable costs of a hire car and accommodation above what the insured is covered for under the policy; and
  9. the inclusion of an amendment so that anyone can report alleged breaches of the Code of Practice to the CGC at any time, and enhancement of the CGC’s powers to report systemic breaches and serious misconduct to ASIC. 
 
The above is intended as only a very brief summary of some of the key recommendations included in the Final Report. The Final Report runs to 109 pages, and can be accessed in full via the following link:
 
http://www.codeofpracticereview.com.au/assets/Final%20Report/250618_ICA%20Code%20Review_Final%20Report.pdf
 
It is important that general insurers read the Final Report and commence their preparations now, to ensure a seamless transition once the revised Code of Practice is released. The amended Code of Practice is due for release by November 2018, albeit that it is anticipated that there will be a transition period with respect to at least some updated or added provisions.
 
Hicksons is available to assist your organisation in its preparation for the implementation of the updated Code, or if you have any queries regarding these proposed amendments. 

Post by Susannah Fricke

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