October 2012 saw the release of an Issues Paper in relation to
the General Insurance Code of Practice (the Code),
by Independent Reviewer Mr Ian Enright. Mr Enright, on behalf of
the Insurance Council of Australia, has called upon stakeholders to
provide feedback on 110 questions, relating to 17 key issues
surrounding the operation of the Code in the Australian general
insurance industry (the Review).
The Issues Paper forms part of the wider general review of the
Code which was commenced earlier in 2012. The backdrop to the
Review, as Mr Enright explains is threefold: the 2010/11 natural
disasters and the role of insurance in recovery from such
disasters, the competitive and volatile nature of the insurance
market and finally, the speed and scale of legal and regulatory
changes in the industry.
The Code itself, introduced in 1994, has 58 general insurance
signatories as of 2011 and is charged with raising service
standards, improving the way that claims and complaints are handled
and helping people better understand how general insurance works.
The Code has undergone a number of reviews in the recent past, with
this current Review process to form part of a number of further
public consultations to be held in 2013.
The key issues raised and the discussion sought on the issues
include the following:
Awareness - is the Code adequately promoted?
Digestibility – submissions are
requested on the Code content, presentation and style.
Code Applicability – to what extent
should the application of the Code be mandatory as a condition of
authorisation and to what extent should it apply to agents, service
suppliers and third party beneficiaries?
Legal Status – does the Code hold force
in the promotion of standards and does it create enforceable legal
Training and Education – are the
standards as set out in the Code on claims handling adequate and
should additional training for the industry be introduced?
Buying Insurance – are the Code's
standards on selling adequate and should standards for phone and
internet sales be introduced?
Coverage – should the Code introduce a
'standard flood definition' approach, standards for retails
product simplification, standard 'unfair contract terms'
and a move towards 'total value replacement' products?
Cancellation and Premiums – should the
Code include a standard requiring insurers to notify an insured
before cancelling an instalment insurance contract? Submissions are
also sought on rising costs and market failure of insurance
Claims – in what circumstances should
the Code explicitly provide for the extension of time limits and
the progression of unresolved claims? Should the Code mandate the
provision of more detailed reasoning when a claim is denied?
Dispute Resolution – to what extent
should a framework and process for internal dispute resolution be
Monitoring and Investigation – what are
the appropriate processes and powers for investigating and
prosecuting breaches of the Code and the imposition of
Financial Hardship – should there be
specific criteria for cases of financial hardship and guidelines
for dealing with such cases, together with the requirement for
insurers to offer the option of Centrepay?
Natural Disasters – to what extent does
the current Code adequately provide for scenarios of extraordinary
catastrophe or disaster and should a mandatory natural disaster
response plan for Code participants be introduced?
Code Governance – how should the Code be
governed and who are the appropriate parties to do so?
A final report, setting out the findings of the review and its
recommendations is understood to be delivered by Mr Enright to the
Board of the Insurance Council of Australia in May 2013.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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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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