Watchdogs fear two-year insurance code delay

Watchdogs fear two-year insurance code delay | Insurance Business

Watchdogs fear two-year insurance code delay

Consumer watchdogs have praised the ICA’s General Code of Practice review but there are fears that the review could succumb to the same fate as the banking code review and take two years to implement.

The ICA released the general code of practice review last week with a host of recommendations to improve the claims and complaints process. The ICA tabled a draft review to be released by October but it is unclear when the final review will come into fruition.

“The review represents a positive step forward,” said Gerard Brody, the CEO of Consumer Action Law Centre. “We want the ICA to move forward quickly by getting code approval with ASIC which they have undertaken.  [The Australian Bankers Association] sat on the code for more than two years before enacting a new one.  We do not want that to happen with the ICA code. The next disaster season is only a couple of months away.”

Brody said it was pleasing to see that the code would apply to all service suppliers including debt collectors and lawyers. He also welcomed the requirement on insurers to notify policyholders before and after they cancel the policy.

He raised concerns have been raised that the changes to financial hardship “clunky” and inflexible for consumers to seek help with premium payments.

If a policyholder is experiencing financial difficulty paying their premium, they must apply for financial hardship status. If they meet the requirements under the Financial Hardship Guideline, the insurer agrees to release, discharge or waive a debt or obligation under the Guideline.

“The focus on hardship is really positive. It shows the insurance industry is committed to supporting and accommodating people who are in financial difficulty. We are keen to make it as flexible and accessible as possible.

“But the concept of applying for a financial hardship status is a bit clunky and an odd approach. The obligation should be on insurers to be accommodating and flexible with anyone experiencing financial difficulty whether they reach the financial status threshold or not.”

There will be further opportunities for consumer groups to comment on the review, Brody said, “which will improve on some already very good suggestions”.