A coalition of consumer advocacy groups is calling on the Federal Government to urgently implement much-needed reforms to the insurance industry as recommended by the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry (the Royal Commission).
“These reforms must be implemented without delay as they will make a positive difference in the lives of millions of Australians who need and are currently claiming on their insurance policies,” said Gerard Brody, CEO of Consumer Action Law Centre.
The call comes after the general insurance industry code governance body released a report showing that there were 31,186 breaches of the Industry Code in 2018-19, compared with 13,668 the previous year. Consumer groups said any push from industry for delays in implementing the Royal Commission reforms was outrageous in the face of such damning statistics.
Last week, the Insurance Council of Australia (ICA) wrote to the Treasurer, Josh Frydenberg, requesting that the timeline for implementing the outstanding insurance reforms from the Royal Commission be significantly delayed until to 1 July 2022. Consumer advocacy groups penned their firm opposition in a letter to the Treasurer.
“We are strongly opposed to a further delay to these reforms as there would be a substantial risk of two more years of poor outcomes for Australians who use insurance.
“We recognise that the insurance industry – like all of Australia – is dealing with a dramatic shift in how it operates but these reforms have been a long time coming. The insurance industry should have already put in the time and effort needed to prepare for these reforms,” said Brody.
“Australians were rightly appalled by the stories that came out in the Royal Commission. The community expects more from insurers and expects the Government to stop the misconduct from happening again.
“A drawn-out delay, especially in the current post-bushfire and COVID-19 environment, is simply not warranted. The work is done, the legislation is drafted. We are calling for the tabling of the reforms in the next parliamentary session starting on 12 May,” he said.
Implementation of the reforms would mean people would be able to buy the insurance they want and need, free from commission-fuelled pressure sales tactics like unsolicited selling. At claims time, it would mean fairer outcomes and shorter delays.
- On 19 August 2019, the Government released its Implementation Roadmap setting out how it will deliver on its response to the Royal Commission, with most reforms tabled in Parliament by 30 June 2020: https://treasury.gov.au/sites/default/files/2019-08/399667_Implementation_Roadmap_final.pdf
- Treasury consulted on exposure draft legislation for many of the reforms in February 2020: https://treasury.gov.au/consultation/financial-services-royal-commission-enhancing-consumer-protections-and-strengthening
- Submissions made by a coalition of consumer groups on the exposure draft legislation are available here: https://consumeraction.org.au/banking-royal-commission-reforms-pivotal-moment-in-implementing-haynes-vision/