What's new in the general insurance code of practice

On 31 October 2019, the Insurance Council of Australia Board approved a new General Insurance Code of Practice. This follows an extensive review and will result in a Code that has been updated and rewritten to further enhance the rights and expectations of customers. The new Code will focus on insurer behaviour and conduct, and will introduce a key commitment to create an ethical corporate culture through best practice and customer service, helping to address consumer concerns and the Hayne Royal Commission recommendations.

Insurers should start preparing to implement training on the new Code and consider how best to introduce a compliance regime that focuses on meeting the expectations and needs of customers as well as the revised Code.

Significant changes to the Code

These include:

• A plain English rewrite to ensure accessibility and that the Code is easy to read.
• A new section for customers experiencing vulnerability. The Code will contain a new section with specific provisions for these customers. It will also require a policy to support customers experiencing family violence and a requirement for employee training to assist employees understand and identify if a customer may be vulnerable. There will also be specific provisions regarding mental health.
• Enhanced financial hardship provisions. Employees and agents involved in debt collection will be required to be trained in the Financial Hardship requirements of the Code.
• The Code Governance Committee’s power to impose a sanction for a Code breach has been extended and the process before imposing a sanction streamlined. Any insurer found to have committed a significant breach will be required to pay a community benefit up to a maximum of $100,000.
• Consumers are to be provided with information on cash settlements and scope of works so they are better informed.
• Mandatory standards for claims investigation, which will include timeframes to update the customer on the investigation process, requirements for requests for information and how the investigation interview should be conducted.

The Code will formally launch in early-2020. Insurance Council of Australia members and other Code participants will be required to transition from 1 January 2020 and all Code signatory companies are to be compliant by 1 January 2021. In addition, all Code signatories will be required to introduce and implement a publicly available policy to support customers affected by family violence by 1 July 2020.