A New General Insurance Code of Practice but Will It Change Anything
A new General Insurance Code of Practice. But will it actually change anything?
The Insurance Council of Australia has released a draft of its new General Insurance Code of Practice for consultation.
The headline change is that many of the Code’s obligations are proposed to become legally enforceable as part of an insurance contract.
On paper, that’s a significant shift.
I have some about specific comments about certain proposed Code provisions but that detailed analysis is for another day.
Instead, this post is about saying:
- Laws alone don’t change outcomes ;
- We need a change in conduct in the insurance industry and that requires a change in behaviour.
I’ve raised this point on other changes to the law relating most recentlu to domestic building in Victoria.
A change to law is relatively cheap and easy in comparison to changing conduct. Law changes attract an immediate hit of adrenaline. Great news! Big change! Media release and blah blah blah…
What we really need is a balanced system. A system where policyholders and insurers have equal footing.
Will it result in insurers paying legitimate claims faster and treating policyholders more fairly?
I really don’t know, I am positive that it may have influence, but I know what would definitely change outcomes for Property damage insurance cases and that is stricter rules around gathering independent expert evidence and its use at AFCA. But I can’t see thise changes on the horizon.
Anyway, for years we’ve had a Code and still we have countless clients engage us after months of delay, endless requests for documents, unreliable expert reports and even insurers giving up on finalising claims and just assuming the policyholder will go to AFCA and doing nothing to resolve the claim.
So, what’s my point? A. Code is only as good as the conduct it changes.
If insurers are already struggling to comply with existing obligations, why should homeowners and small businesses simply assume a rewritten Code will suddenly transform claims handling?
Don’t misunderstand me. If consumers gain enforceable contractual rights, that may be a positive development. But the relationship that insurers have with ‘preferred repairers’ as expert witnesses must also stop.
The real test is whether ordinary Australians notice the difference.
For too long the insurance industry has largely shaped the conversation around insurance reform. The industry has a strong voice.
Homeowners need one too.
Every day I act for people whose homes, businesses and lives have been turned upside down by property damage and building, neighbour and insurance disputes.
My job isn’t to protect insurers. My job is to ensure policyholders receive what they paid for.
The proposed Code deserves careful scrutiny.
I’d be interested to hear from brokers, builders, loss assessors, engineers and fellow lawyers.
What do you think of the proposed new Code and how do we change the culture in the industry?
This article is a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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