The Insurance Council of Australia (ICA) opened public consultation on June 24 on a redrafted General Insurance Code of Practice, with submissions open until July 21, 2026. The code has been in place since 1994 and must be independently reviewed every three years. The current redraft draws on the Industry Action Plan, released in March 2025, which itself followed recommendations from the Independent Code Review and the Parliamentary Flood Inquiry into insurers’ responses to the 2022 floods.
The draft’s central change is that key insurer obligations would become legally enforceable as part of consumer contracts, subject to Australian Securities and Investments Commission (ASIC) approval. Other proposed changes include the automatic acceptance of home and motor claims left unresolved after 12 months, a new circumstances-based definition of vulnerability with an accompanying Extra Care framework, and broadened family violence protections covering financial abuse and coercion – each shifting from voluntary commitments to contractually enforceable obligations. The draft also introduces new standards for trauma-informed claims handling and the ICA’s Expert Report Best Practice Standard.
ICA CEO Andrew Hall said the revision reflects a changed operating environment. “The world has changed and the Code needs to keep pace with those changes; customers face more frequent extreme weather, more complex claims, and new technology that is reshaping every part of the insurance process. For the first time, insurers’ key commitments under the Code will be legally enforceable, claims left undecided after 12 months will be automatically accepted, and new vulnerability protections provide greater support for customers who need it most,” he said. The existing code remains in force while the review is underway.
The consultation opens against sustained complaint volumes. The Australian Financial Complaints Authority (AFCA) 2024-25 Annual Review shows the authority received 34,231 general insurance complaints in 2024-25 – a 17% increase on the previous year. Delay in claim handling was among the top three issues across all financial complaints, and comprehensive motor vehicle insurance was the most complained about product, making up roughly a third of all general insurance cases.
The automatic acceptance provision addresses one of the most operationally significant complaint drivers – claims that remain open past reasonable timeframes without a formal decision. Strengthened requirements around primary points of contact and trauma-informed claims handling also map onto categories AFCA has identified as persistent concerns – and it is those sustained volumes that form the basis of the Australian Consumers Insurance Lobby’s (ACIL) argument that the industry has had sufficient opportunity to lift standards and has not done so.
ASIC’s role under the current framework is evaluative rather than administrative: where ASIC approves a financial services code, it signals consumer confidence in that code but does not confer ongoing regulatory administration of it. That distinction is material to the debate the draft has reopened – what ASIC approval would deliver for the General Insurance Code is independent scrutiny and contractual standing, not a transfer of governance to the regulator.
ACIL argued the redraft demonstrates the industry is unable to prioritise consumer protections over its own commercial interests, and called on the federal government to go further – removing administration of the code from the ICA entirely. “The Insurance Council has once again prioritised commercial interests ahead of professional standards. After years of inquiries, reviews, and public criticism, the industry was handed a clear roadmap for reform. Instead, it has chosen to water down existing protections and leave many of the most significant recommendations unaddressed. This is no longer a drafting issue. It is a governance failure,” said ACIL spokesperson Tyrone Shandiman.
Shandiman said the group supports contractual enforceability in principle but argued it has limited value if the underlying standards are inadequate. “A weak code that is contractually enforceable is still a weak code,” he said. ACIL also raised a structural concern about the ICA’s dual role as industry peak body and code administrator, noting that despite more than 120 recommendations for reform across successive reviews, meaningful change had not been delivered. The ICA did not respond publicly to ACIL’s specific characterisation of the draft prior to publication, and the particular protections ACIL alleges were weakened could not be independently verified from the sources available to this publication.
Assistant Treasurer and Minister for Financial Services Daniel Mulino, speaking at the AFR Insurance Summit on June 16, backed the code’s progression toward ASIC approval and contractual enforceability. “I think the work in the code...is really important and that it be landed over the coming months, and it’s going to be a really important way of providing safeguards in the overall market dynamics,” he said.
Mulino chaired the Parliamentary Flood Inquiry – the process that produced the recommendations underpinning this code review cycle. On government intervention more broadly, he said any action would need careful design. “I think it has to be very tailored, and there’s a risk of unintended consequences,” he said, pointing to price caps in California – where that approach contributed to insurer withdrawals – as a cautionary example.
Beyond the code, Mulino identified price transparency and affordability for high-risk properties as active government priorities, and described effective insurance markets as central to how Australia manages land use and residential housing risk. “Insurance markets, like any markets in my portfolio and beyond, work best when competition is effective, when information is as clear as possible and when consumers have confidence that minimum standards will be met when it matters most,” he said.
Following the consultation period, the ICA intends to lodge the redrafted code with ASIC for approval. Submissions close July 21, 2026, via insurancecouncil.com.au/2026CodeSubmissions.
