For decades, the General Insurance Code of Practice (The Code) has operated as a handshake agreement - a set of voluntary obligations that insurers sign up to in good faith, with limited external consequence for those who fall short. That era is coming to an end. Within the next two to three weeks, the Insurance Council of Australia (ICA) says it will release a redrafted Code for public consultations.
The ICA is in the final stages of its comprehensive rewrite of the Code with objectives that represent a fundamental departure from previous versions, including making the Code’s obligations contractually enforceable. When the new Code takes effect - currently targeted for 2028 - it will do something the current version has never done: form part of the consumer contract itself.
“Insurers make commitments about what they’ll do and offer people, but how do you put meaningful enforceability behind those commitments?” ICA CEO Andrew Hall said at a Thursday webinar for the Financial Services Accountants Association (FSAA). It is a question the industry has been quietly wrestling with for years. The new Code aims to be the answer.
The shift to contractual enforceability aligns the insurance industry’s Code with the banking code - a significant symbolic and practical alignment. It also means that for the first time, consumers who believe an insurer has breached its Code obligations will have a potential path to the courts, provided they meet the relevant threshold. For insurers and the brokers advising their clients, that is not a minor administrative update. It is a structural change in the accountability framework underpinning the entire sector.
The Code Committee already holds sanction powers and can issue fines for breaches under the current framework. What the new version adds is a layer of legal exposure that did not previously exist - and with it, a sharper incentive for compliance systems, documentation standards and claims handling processes to be airtight.
“It will be a significant step change for the industry,” said Hall - which should pique the interest of compliance officers, general counsels and brokers in what is coming.
The ICA board expects to release the new draft Code for public consultations within weeks, allowing member companies, consumer groups and other stakeholders to scrutinise the new framework before it moves toward ASIC approval. Hall said he expects 2028 to be the actual start date, which will give insurers time to adapt and reissue their product disclosure statements (PDS).
Behind the technical architecture of the new Code sits a broader strategic objective: rebuilding and deepening consumer trust in general insurance at a time when it matters enormously.
Hall acknowledged that most policyholders are unaware a Code even exists - the first time many consumers encounter it is when something goes wrong and they go looking. The new Code is not designed to change that overnight. What it is designed to do is create the conditions in which, when things go wrong, the machinery of accountability is unambiguous and enforceable.
“I believe we have a very strong case to show that the industry has been serious about standing behind the commitments it makes,” Hall said.
However, consumer groups are expected to push for more during the consultation period. Hall was pragmatic on that front - acknowledging that pressure is part of the process - but confident the new Code represents a substantive advance, not a cosmetic one.
