01.CHOICE welcomes code changes
The insurance industry has vowed to provide better disclosure around claims decisions, speed up claims processing, and improve the way company staff deals with policyholders.
The proposed changes to the industry's code of practice, which are due to be finalised at the ICA Board meeting on February 2 this year, address areas that proved to be particular sore points for policyholders following the disasters of summer 2011.
The proposed changes to the General Insurance Code of Practice, under which the industry regulates itself, were recently made public by the Insurance Council of Australia (ICA) and have been agreed to in principle by the ICA Board.
Consultation on how the code might better serve customers came from the Commonwealth Government, Treasury, the Australian Securities and Investments Commission, the Financial Ombudsman Service and consumer advocates including CHOICE.
The changes include:
- A four-month deadline for accepting or rejecting a claim unless there are extenuating circumstances, including “extraordinary catastrophe or disaster as declared by the Insurance Council Board”.
- A 12-week deadline for reports by external experts, such as hydrology reports; the sharing of these reports with policyholders; and an explanation of how they affect claims decisions if requested.
- Enhanced employee training so that company staff can “carry out their claims handling tasks and functions competently and deal with customers professionally”, with a focus on understanding a policyholder’s particular circumstances.
- A new “right to claim” wording to be added to the code: “We will not discourage you from lodging a claim, even if we are of the view that it is unlikely to be accepted.”
If the changes are added to the code in February, companies that observe the code will have to start conducting business accordingly no later than July this year.
CHOICE supports this move by the insurance industry and urges the ICA to continue to take steps to increase transparency and improve consumer confidence in its products.
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