The Insurance Council of New Zealand (ICNZ) is reviewing its Fair Insurance Code, the current best practice standard for the insurance industry.
The Code specifies the responsibilities of insurers and customers and details all disclosure requirements, communication timelines and complaint processes. According to ICNZ, the Code is ‘New Zealand’s best example of self-regulation and sets high standards of customer service from members.’
Key areas of focus are likely to be privacy and data storage, the Code’s language and format accessibility, and the need for clarity in internal and external dispute resolution processes.
“We’ve received submissions from the external stakeholders, and we’re now sharing a summary of that report with the independent members of the Code Compliance Committee,” Chief Executive of ICNZ Tim Grafton told Insurance Business.
“We’ll then go through a consultation with our members before reporting to our board, which will make decisions around what changes will take place.”
Disclosure is likely to be a widely discussed topic, with the Code currently requiring members to respond reasonably to instances of non-disclosure.
“The general insurer members of ICNZ took a big step back in 2016 with the current Code,” says Grafton. “What was ‘reasonable’ would be determined by external dispute resolution schemes rather than the insurers themselves, and this closely mirrors the statutory approach taken in the UK. The Code already has moved well ahead of what current requirements are, but that’s an area that could potentially be looked at further.”
A review of the insurance contracts law is also underway and aims to assess and consolidate existing laws. Customer price comparisons were a key talking point, with the ICNZ expressing scepticism at their increasingly widespread use.
“Insurance simply isn’t the same as a commodity like electricity where the product doesn’t differ between providers, and price and service is all that matters,” says Grafton.
“When it comes to insurers, what you’re purchasing is a legal contract which can cover a multitude of matters which may or may not be appropriate to your individual circumstances. So if you have simple aggregator sites where people are purchasing on the basis of price, then inevitably we’re going to get into a situation where people are purchasing products that are not appropriate to their needs. The whole drift of regulation in the financial advisory and conduct area is designed to put the customer’s best interest first.”
A revised Fair Insurance Code is expected to be published in 2019.