Consumer groups including the Financial Rights Legal Centre, Financial Counselling Australia and the Consumer Action Law Centre, have welcomed the Insurance Council’s announcement that they will include its code of practice into the contracts they have with customers but seek assurances protections will not be watered down in the process.
Quotes from Financial Rights Legal Centre Senior Policy and Advocacy Officer Drew MacRae:
“Ensuring that the general insurance sector meet the promises made to consumers in their code of practice by including the code in their contracts has been a long-held goal of ours. We are therefore pleased to see insurers taking this important step.”
“There is however a long way to go.
“The mooted Code re-draft process must not come at the expense of consumers outcomes. First, any re-drafted code must not water down or remove commitments already made. Second, the re-draft should not result in any code commitments being moved into unenforceable “guidance” or “standards.” And third, it must address all the relevant issues raised in the Flood report and the Code Review. Any move to weaken or otherwise undermine existing, and much needed new, consumer protections in the code will simply not meet community expectations. Both the Code Review and Flood Inquiry have called for more commitments, not fewer. We therefore look forward to engaging constructively with the Insurance Council and its members during the re-drafting process to ensure this does not occur.”
“The sector has committed to a new Code being implemented by 2027. This is a long way off - 5 years after the 2022 floods and subsequent poor response from insurers that precipitated a raft of recommended changes to claims handling and other key processes. In the absence of much needed new protections, it is imperative that insurers act now to lift their claims handling game in line with the recommendations that they have agreed to. That includes, for example, proactively communicating with customers following a natural disaster and increasing temporary accommodation benefits and proactively managing these benefits.”
Quote from Louise Hayes, National Coordinator Disaster Recovery with Financial Counselling Australia
“Financial counsellors work with people who have been badly treated by insurers during some of the most traumatic times off their lives, resulting in significant financial and mental stress.”
“We need this new approach to drive an improvement, and not a reduction, in consumer protections - especially around how insurers deal with vulnerable customers.”“When the now Assistant Treasurer, Dr Daniel Mulino, released the Flood failure to future fairness report in Parliament last year, he said in his Chair’s forward, ‘the Code needs to be strengthened as a priority’. Financial counsellors could not agree more.”
Quote from Rose Bruce-Smith, Senior Policy Officer, Consumer Action Law Centre
"We're pleased that the industry has committed to incorporating the Code in customer contracts. However, it's essential that this step forward doesn't come at the expense of any consumer protections. Timeliness is also of the essence - as the current floods in NSW have unfortunately made all too clear, we can’t delay uplifts to consumer protections while natural disasters cause major insurance claims with increasing frequency."
Contact
For further information contact media@financialrights.org.au or 0414729006
