As indicated on the report cover from www.codeofpracticereview.com.au
“This paper is the Initial Report for the independent review of the 2020 General Insurance Code of Practice being undertaken over 2023/4.”
No doubt many readers will be aware of this review being undertaken by former Australian Prudential Regulation Authority (APRA) Deputy Chair Helen Rowell (Panel chair), consumer expert Gerard Brody, and industry expert Paul Muir.
The Code of Practice (COP)
In Australia, the Insurance Code of Practice established by the Insurance Council of Australia (ICA) primarily applies to general insurance policies. While the code is voluntary, it is widely adhered to by insurers and sets standards for the treatment of consumers, including individuals and small businesses (defined as employing fewer than 100 people if the business involves manufacturing or fewer than 20 people for other businesses).
The code covers general insurance products such as home building and contents, car, pet, and travel insurance and commercial insurance for small business but for medium and large businesses, the Insurance Code of Practice does not typically apply.
The Terms of Reference for the review highlight a focus on relevant external developments, including changing expectations and practices related to catastrophe response, financial hardship, and vulnerable customers, and the interaction of the Code with the law considering legislative changes since the 2020 Code was implemented.
Recommendations
This Review incorporates some 101 Recommendations; very much focused on Customer Vulnerability and customers suffering Financial Hardship. In fact the first 39 Recommendations deal with only those two issues: Financial Hardship and Customer Vulnerability.
Of particular importance to those involved in claims handling will be the recommendations outlined in the report referring to core obligations regarding paragraphs 21 and 22 of the code of conduct.
Interestingly, apparently 43% of all significant breeches of the code since commencement of the 2020 code relate to paragraph 21 – which requires code subscribers, their distributors and service suppliers to be honest, fair, transparent, and timely in their dealings with customers.
This is important because whilst the code does not apply to medium and large businesses, we are sure those responsible for handling claims in those organisations would only want to deal with reputable service suppliers but clearly that is a part of the claims process that is problematic.
What we can learn
While many of our ReSure clients, often operating as mutual organisations, are not directly bound by the General Insurance Code of Practice, gaining insights into its structure and ongoing developments is invaluable. At ReSure, we use this understanding to enhance how we collaborate with clients, ensuring that best practices are embedded across all our services.
