The Insurance Council of Australia (ICA) has submitted a revised General Insurance Code of Practice to the Australian Securities and Investments Commission (ASIC), introducing contractual enforceability for the first time in the Code’s history.
Under the revised Code, key obligations will be written into consumer insurance contracts. Policyholders will gain a direct contractual right to enforce those obligations through the courts, the Australian Financial Complaints Authority (AFCA), or an independent Code Governance Committee.
For brokers, the shift carries practical weight: clients will now have legal avenues to hold insurers to account on claims handling standards, vulnerability support, and transparency commitments that were previously aspirational.
“Insurance is a promise to be there when people need it most – this Code sets a higher benchmark for the service and support people should expect, including legal enforceability for key Code provisions,” said ICA CEO Andrew Hall.
The revised Code follows years of scrutiny over insurer conduct, particularly after the 2022 major floods. A 2024 parliamentary inquiry by the House Standing Committee on Economics, titled Flood failure to future fairness, made 86 recommendations after finding what Committee Chair Dr Daniel Mulino described as “the collective failure by insurers to meet their obligations to policyholders after the 2022 floods,” according to the committee’s report published by the Australian Parliament.
Among those recommendations were calls to register the Code with ASIC, make it enforceable through insurance contracts, and require insurers to accept claims in full if no decision was made within 12 months. The revised Code addresses each of those points.
The National Insurance Brokers Association (NIBA) said in its July 2026 submission to the ICA consultation that it supports stronger consumer protections and welcomes clearer ways for customers to enforce them. NIBA did flag that certain exceptions in the Code may limit what is actually enforceable, including provisions where the policy prevails over the Code in the event of a conflict, and exclusions for failures caused by events beyond the insurer’s control.
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One provision with immediate relevance for brokers is the automatic acceptance rule. Home and motor vehicle property claims will be automatically accepted after 12 months where no decision has been made due to circumstances within the insurer’s control.
The Code requires a senior employee to review any property claim’s progress at least three months before the automatic acceptance date, with the review to be completed within 20 business days. If no decision follows, insurers must provide written notice confirming whether the claim qualifies for automatic acceptance and outline any delay factors affecting eligibility.
Complaint data underlines why this provision exists. AFCA received 36,022 general insurance complaints in 2025-26, up 5% and marking a fifth consecutive year of growth. Claim handling delays accounted for 8,246 of those complaints, a 25% increase, and have been the most common issue for five years running. Motor vehicle comprehensive complaints rose 28% to 14,430, while home building complaints climbed 25% to 8,547.
AFCA chief ombudsman and CEO David Locke said insurers remain responsible for keeping customers informed about delays, even as climate events and supply chain issues continue to affect claims timelines. “Nobody wants to see this number of complaints,” Locke said.
Read more: Insurance complaints surge for fifth year as claims issues mount
Several sections of the revised Code state that insurers meet their obligations “by providing the information to the Broker.” This positions brokers as the conduit through which compliance is delivered for policies they have placed.
NIBA’s submission raised this point directly, asking that the broker pass-through mechanism does not reduce customer protections and that brokers’ own Code obligations are recognised alongside insurer requirements. NIBA also recommended that appointed brokers be kept informed of claims correspondence and progress unless the customer or broker instructs otherwise in writing.
The Code sets a four-month deadline for insurers to make a decision on any claim or provide written reasons for the delay. NIBA recommended shortening this period and treating it as an outer limit rather than a standard timeframe. External experts must deliver reports within 60 business days of appointment.
The Code introduces a circumstance-based definition of vulnerability recognising that it can be experienced by anyone. A new “Extra Care” framework commits insurers to tailored support and flexibility.
The definition of family and domestic violence has been expanded to include financial abuse and coercion, with protections becoming contractually enforceable. Insurers will not require an intervention order for customers to access these protections.
Cash settlement provisions have also been tightened for home building claims. Insurers must base amounts on what they reasonably calculate to be the cost to the customer to complete the insured rebuild or repair. Customers can request a review within 12 months if they can demonstrate the amount was insufficient.
“This new Code is about making sure that promise is reflected in how customers are treated, particularly when they are facing difficult or complex circumstances,” Hall said.
ASIC will now review the Code for approval. A transition period is expected before the Code takes effect on new and renewed policies. The ICA also released a paper outlining how consultation feedback was considered.
“Our focus now is on working constructively with ASIC through the regulatory process so that the Code is approved and these stronger protections can begin delivering for consumers,” Hall said.
