A new Code of Practice for insurers came into effect yesterday, with an overhaul of complaints handling procedures, among other changes.
Just as NIBA’s recently revamped Insurance Broker Code of Practice did, the new Insurance Council of Australia (ICA) General Insurance Code focuses on using plain English to ensure it is understood by all parties.
The new Code will have most impact on brokers when they are acting as agents for an insurer that subscribes to the Code.
Key changes include the establishment of a fully independent Code Governance Committee (replacing the Code Compliance Committee) and setting out clearer and more detail procedures for resolving complaints.
The new Code also bolsters protections for clients facing financial difficulties, as well as mapping out strict timeframes for claims responses.
For example, insurers are now compelled to provide written reasons for denying claims with 10 days of investigations concluding.
Radford Lawyers Principal and NIBA Legal Counsel Mark Radford says: “The Code amends the old Code in a number of respects and commits insurers to standards of service that are above and beyond their statutory obligations under the Insurance Contracts Act 1984, and enhances the rights of consumers.
“For this reason it is important to insurance brokers as consumer advocates to understand the obligations the Code imposes and the benefits for their clients.”
ICA Board President Mark Milliner says the Code is a yardstick for industry self-regulation, which is especially important given the Federal Government’s focus on reducing regulation and red tape for business.
“The ICA listened to the perspectives and concerns of the community, consumer advocates, governments and regulators, and the industry itself,” he says.
“The 2014 Code places insurance customers at the forefront of our members’ businesses. It commits insurers to high standards of service and to promoting better and more informed relationships between insurers and their customers.”
View the full Code here. A list of insurers and underwriters who have signed up to it can be viewed here.
NIBA will soon be releasing an online CPD course to ensure its members are fully up to speed on the Code’s ramifications.