NIBA welcomes the new General Insurance Code of Practice

The National Insurance Brokers Association (NIBA) CEO Dallas Booth has welcomed the new General Insurance Code of Practice as the new benchmark commitment by insurers and their representatives towards policyholders and consumers.

Booth said, “There are a number of significant changes in the new General Insurance Code, particularly in relation to vulnerable customers and customers in financial distress. Insurance brokers acting on behalf of insurers will adopt and follow the new General Insurance Code requirements. In addition, NIBA will ensure the new Insurance Brokers Code of Practice will be consistent with the insurer Code when the broker Code is finalised later this year.”

Effective 1 July 2021, the updated Code includes strengthened customer protections in line with community expectations, and has been developed by insurers in consultation with a range of stakeholders including consumer groups.

Insurance Council of Australia (ICA) CEO, Andrew Hall said: “The new Code of Practice for general insurance sets clear obligations for insurers with independent enforcement through the Code Governance Committee, who can impose tougher sanctions for breaches.”

Features of the new Code include:
 Sanctions for significant Code breaches of up to $100,000 in the form of Community Benefit Payments
 Independent enforcement through the Code Governance Committee (CGC)
 Cost comparisons between new and previous policies on renewal notices
 Responsibility for quality of repair work undertaken on behalf of insurers
 Streamlined complaints process
 Mandatory standards for claims investigators
 Clear timeframes to respond to claims, complaints and information requests
 Cash settlements better explained

If an insurer is found to have significantly breached the Code one of the sanctions available to the CGC is to impose a penalty in the form of a Community Benefit Payment of up to $100,000.

The types of insurance covered under the Code include motor vehicle, home building, home contents, sickness and accident, travel insurance, personal and domestic property. The Code includes provisions for customers experiencing vulnerability, financial hardship and family violence that were put into practice in 2020 and early 2021 as part of insurers’ response to COVID-19.

The Insurance Council of Australia (ICA) has revealed that it will run an information campaign in coming months to raise awareness of the new code and intends to apply for ASIC approval of the Code once ASIC updates the appropriate Regulatory Guide.

You can find information about the code on the ICA website.