Never before have there been so many inquiries into the
insurance industry as there have been in the past two years.
Combined with this we have a Federal Government which, despite many
and varied distractions over that same period, has been very
focussed on the industry and implementing reforms based on
recommendations contained in these reports.
On Monday 27 February 2012, the House Of Representatives
Standing Committee On Social Policy And Legal Affairs delivered its
report "Volume 1: The Operation Of The Insurance Industry
During Disaster Events".
The Committee was charged with inquiring into the operation of
the insurance industry during disaster events. It received
submissions from 79 individuals and organisations, 700 responses to
an online survey and travelled to areas affected by natural
disasters where it held 18 public hearings and 5 site
Legislation should be enacted obliging general insurers to
offer an insurance policy that conforms to Standard Cover,
including flood cover and full replacement in the event of total
Legislation should be enacted requiring general insurers to
make it clear to policy holders where a policy deviates from
The Insurance Contracts Amendments Bill 2011 should be
Legislation should be enacted to remove the exemption of
general insurers from unfair contract terms laws.
The General Insurance Code of Practice should be amended
significantly, to ensure that consumers are provided with more
information on the claims handling process and to ensure that
timeframes and standards are adhered to during disaster
The Australian Securities And Investments Commission should be
empowered to publicly name and shame insurers that breach the Code
Legislation should be enacted to make a breach of the duty of
utmost good faith a breach of the Insurance Contracts Act, thereby
empowering the Australian Securities and Investments Commission to
regulate insurance claims handling.
Legislation should be enacted to make the General Insurance
Code of Practice compulsory for all general insurers.
Regulations should be amended to oblige general insurers to
provide clear and comprehensive information about both internal and
external dispute resolution processes to policy holders at the time
of claim lodgement, and to prohibit multi-tiered models of internal
Australian Government funding should be allocated to the
Insurance Law Service so that it can mobilise temporary offices in
areas of need following natural disasters.
Funding from the Australian Government and the insurance
industry should be allocated to the establishment of a consumer
advisory position with the Financial Services Ombudsmen.
The Australian Government should investigate ways to reduce the
cost of calling 1300 numbers from mobile telephones in areas of
A joint industry Government action group should be established
immediately to address the rising costs of potential market failure
of insurance premiums across Australia.
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The failure of a party to call a witness does not necessarily give rise to an adverse inference being drawn in accordance with Jones v Dunkel (1959) 101 CLR 298. An unfavourable inference is drawn only if evidence otherwise provides a basis on which that unfavourable inference can be drawn.
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