Co-author: William Jolly
Here’s some key information about the Code.
What is the General Insurance Code of Practice?
The General Insurance Code of Practice is the general insurance industry’s way of setting standards for its own conduct.
It outlines the minimum standards of service that you should expect from general insurers in many aspects of your relationship with them, such as when buying and renewing insurance, making claims and lodging complaints.
The Code was introduced back in 1994, and has since been independently reviewed six times – in 1998, 2006, 2009, 2012, 2014 and most recently in 2017.
The language used in the code is designed to be easily understood by consumers and you can read it in full by visiting the General Insurance Code of Conduct website. The Insurance Council of Australia (ICA) carried out a review of the code in 2017 and the final report can now be found here.
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What types of insurance does the Code cover?
General insurance typically aims to protect your possessions, such as a car or a house. Life and health insurance are not included as they are designed to protect people financially from illness, injury or death.
The General Insurance Code of Practice covers nearly all types of general insurance, including:
- Motor vehicle insurance (comprehensive and third-party property);
- Home building insurance;
- Home contents insurance;
- Sickness and accident (does not cover health insurance or life insurance);
- Consumer credit insurance;
- Travel insurance;
- Personal and domestic property insurance (does not cover workers’ compensation);
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What types of insurance aren’t covered?
Below are some of the types of insurance that aren’t covered by the Code. But some of these may be covered by separate industry codes or specific laws and regulations.
Because the Code doesn’t cover these types of insurances, it may be all the more reason to compare your options and see if you can find the right product and the right provider to suit your needs:
Which insurance companies must follow the Code?
A large number of insurance companies, industry participants, and affiliated organisations subscribe to the Code of Practice, meaning they have to follow the Code. Subscription is mandatory for members of the ICA who offer any products covered by the Code. You can find the complete list of participants on the Code of Practice website.
The majority of the big insurance providers in Australia are on the list, including Allianz, QBE, RACQ, Westpac, and many more. Any other industry participants may also subscribe at any time, and the ICA encourages all general insurers to adopt the Code.
How is the Insurance Code of Practice enforced?
The Code is enforced by the Code Governance Committee (CGC), an independent body that monitors and enforces insurers’ compliance with the code.
The Code is binding on any insurers or other industry participants who have adopted the Code. If a company has been found to be in breach of the Code, action is taken in two steps:
- The company is ordered by the CGC to take corrective action
- Breaches that are not corrected are subject to sanctions at the discretion of the CGC
General insurance is one of the most regulated industries in Australia, and insurers are also regulated by the Australian Securities and Investments Commission (ASIC) and the Australian Prudential Regulation authority (APRA).
What are the Code’s financial hardship provisions?
Recent versions of the Code include provisions to help consumers who are suffering from financial hardship.
If you’re experiencing financial hardship (which is defined in the Code as where you have difficulty meeting your financial obligations to an insurer), the provisions in the Code require insurers to try and provide assistance to you.
If the insurer decides you are entitled to some form of financial hardship assistance, you and the insurer will then work together to decide on a payment arrangement, which could take the form of an arrangement such as:
- Extending the due date of the payment;
- An instalment plan for payment; or
- A reduced lump sum payment.
It’s important to note that the financial hardship provisions contained in the Code do not apply to unpaid general insurance premiums. Instead, they may apply if you have made a claim but are struggling to pay the excess, or if you have caused damage while uninsured and owe money to the other party’s insurer.