New laws on insurance promise to make things easier for insurers, brokers and clients alike but more controversial amendments are yet to be passed.
Late last week, the Federal Government passed the Insurance Contracts Amendment Bill 2013, billed as the most significant change to the Act since its introduction on 1984.
Among the key reforms are allowing statutory notices and documents to be emailed, along with giving ASIC increased powers to act on breaches of the duty of good faith by insurers, including in claims handling.
Financial Services Minister Bill Shorten says: “The ability for statutory notices and documents to be provided electronically will not only bring the insurance industry into line with other industries but reduce complexity for consumers.”
The duty of disclosure has also been made easier for consumers to understand and comply with.
Linda Evans, NIBA’s Professional Executive, says: “It’s extremely important that brokers are aware of these amendments and NIBA College is finalising an online CPD program on the amended Insurance Contracts Act now, which will be available to brokers in July or August.
“This will be a very valuable source of information for staff at brokerages across Australia.”
Insurance Council of Australia CEO Rob Whelan says consumers expect to be able to conduct their business using a computer or smartphone.
“These changes will allow that to become a reality and will allow consumers to benefit from a 21st century system,” he says.
“The changes mean consumers will benefit from new ways to understand and interpret their policies, while insurers will benefit from the increased speed of which electronic notices are delivered compared to traditional measures.
“It will mean insurers can develop interactive Product Disclosure Statements so consumers can quickly navigate to the parts of their PDS they want to read, while also allowing them to search documents quickly for important terms and definitions.”
For a high-level summary of the changes, click here.
Meanwhile, another amendment to the Insurance Contracts Actfocusing on unfair terms has been introduced to parliament but is believed to be unlikely to pass before the election in September.
In its current form, the amendments bill would introduce unfair contract terms protection, such as those currently covering mobile phone and credit card contracts, to standard form consumer general insurance contracts.