When the latest version of the General Insurance Code of Practice was approved late last month, it became clear that sweeping changes were on the horizon.
“The new Code of Practice is the result of more than two and a half years of consultation and development,” ICA board president Richard Enthoven said at the time.
“It has been one of the most thorough and wide-reaching reviews and revisions of the Code ever undertaken since it was developed in 1994,” he added.
“There are some considerable changes in terms of customer focussed outcomes – particularly in the areas of vulnerability, mental health, financial hardship, and domestic violence,” she said. “These are all very important changes that our industry is making, and I think they’re incredibly positive.”
Willsford noted that the updated code carries enhanced sanction powers, making it easier for the governance committee to enforce penalties when appropriate.
“There’s a lot more teeth to the code itself, in terms of its enforceability and penalties,” she said. “Kudos to the industry for that – I think it’s made a very positive and significant step forward in terms of being able to focus on really good customer outcomes.”
Importantly, Willsford also discussed the effects felt by brokers, as the new Code not only applies to insurers but also their supply chain.
“The implications of that are still being worked through, but that will focus on the customer experience, which is great,” she said. “However, if you’re a broker with delegated claims authorities, there are implications for you that perhaps historically wouldn’t have been easily collected into these kinds of programs.”
Willsford’s comments come after ANZIIF announced it would be rolling out an education solution – focussed solely on the new Code – to help bring the entire industry up to speed.
“In terms of the training itself, we’ve collaborated closely with industry and the ICA to develop an engaging, comprehensive set of programs that will really assist in embedding that knowledge and skill – particularly around vulnerable people,” she said.
Aiming to deliver the program in an efficient and productive way, the learning solution also recognises current competency after the first year, so users won’t have to go over features they already know.
“It is demotivating and disengaging to go through the motions, so if we can create customer-focussed education that adds value, and does that efficiently and effectively across industry, that will inherently give a better outcome,” said Willsford.
“People will actually engage in the bits that they need to engage in, rather than sitting there wanting to poke their eyes out with knitting needles.”
The new Code
The new Code of practice is not yet publicly available, but the Insurance Council of Australia has revealed some of its key features, which include the following:
- Plain English: A comprehensive plain-English rewrite ensures it is an easy-to-read and accessible document for consumers.
- Vulnerability: A new section has been created for customers experiencing vulnerability. Firms will soon have to implement a policy to support customers experiencing family violence and must train appropriate employees to understand if a customer may be vulnerable. Specific provisions regarding mental health will also be made.
- Enhanced financial hardship provisions: Financial hardship provisions have been strengthened and include requirements for employees and agents involved in debt collection to be suitably trained.
- Enhanced sanction powers: The Code Governance Committee (CGC) will have extended ability to sanction in the event of a breach and imposing a breach will be easier.
- Community benefit payment: The CGC will be able to order an insurer to pay a community benefit payment of up to $100,000, in the event of a significant breach.
- Cash settlements and scope of works: Subscribers will need to provide consumers with information on cash settlements so that they are better informed. A provision for scope of works similarly aims to help consumers understand this process.
- Investigation standards: Mandatory standards for claims investigators have been introduced. The standards include timeframes for updating a customer, requirements regarding requests for information and requirements as to how the investigation interview should be conducted.