Friday, 30 May 2025
The Insurance Council of Australia and insurers are moving to the next stage of the development of a new General Insurance Code of Practice, with a redrafted Code that is consumer-centric, modern, fit-for-purpose, and contractually enforceable.
The current Code was developed in 1993 and has been reviewed and amended on multiple occasions in its 30-year history.
The process of updating the 2020 Code commenced earlier this year following the completion of an independent review.
As a key document for consumers to understand their rights, the Code needs to be clear, concise, and relevant, but stakeholders and users report that the Code can be difficult to understand and doesn’t reflect
contemporary challenges faced by consumers and insurers.
After engagement with key stakeholders, it has been determined that the new Code should be contractually enforceable, with clear rights and obligations of insurers set out in easy-to-understand language.
That is why this next stage of the Code review process will be to redraft a new Code.
The Code will be developed utilising the feedback and recommendations provided through the work of the Code Review, the Parliamentary Flood Inquiry, and ongoing stakeholder feedback.
The industry will undertake further consultation throughout the development and drafting process with the ICA’s Consumer Advisory Council, regulators, government, and other expert parties.
Public consultation is expected to take place in the first quarter of 2026 with the Code expected to be lodged with ASIC for approval mid-2026. The current Code will remain in place in the interim.
Improving consumer protections and customer experience is a key focus of the industry, and a range of initiatives have already been completed or are underway as a result of work done since the 2022 floods including:
- The industry has agreed an Expert Report Best Practice Standard to provide guidance on the use of expert reports in determining claims, which will be referenced in the new Code.
- The ICA has released an Extreme Weather and Disaster Response Charter that outlines how the insurance industry prioritises, plans, and delivers an extreme weather response.
- The ICA is developing a comprehensive industry framework to support customers experiencing vulnerability and intends to include vulnerability definitions and specific insurer obligations for vulnerable customers as part of the rewritten Code.
- The ICA intends to make an application to the ACCC in the second half of 2025 to authorise insurers to use standard policy definitions relating to home maintenance and wear and tear.
In addition to the rewrite of the Code, the ICA and insurers are progressing work to implement recommendations agreed by industry from the Parliamentary Flood Inquiry.
This includes insurers in-principle agreement to have internal consumer advocates to support customers with the claims process. Noting the diversity of business models across insurers, each insurer will consider how best to implement this role internally.
Quotes attributable to ICA CEO Andrew Hall:
While our focus today is on the flood recovery in New South Wales, it’s important that we maintain oursights on supporting insurance customers into the future.
Developing a new Code is a once-in-a-generation opportunity to deliver better outcomes for consumers.
As an industry we are committed to maintaining and uplifting consumer protections, making it easier for them to understand their rights and engage with their insurer.
A lot has changed in 30 years, and the pace of change is only expected to accelerate moving forward, impacting all aspects of insurance from underwriting through to claims handling.
Equally, since 1993 Governments have enacted a significant amount of new legislation and regulation that now governs the industry across how insurance is designed, sold and used, and these baseline requirements are being enforced by regulators.
A well-functioning Code must balance the need to generate trust in the robustness of the industry’s consumer protection frameworks with the flexibility to be able to continue to provide accessible and affordable products to Australians as extreme weather risk and pricing pressures continue to grow.
Where appropriate, the revised Code will include some prescriptive provisions, including those which demonstrate recent inquiry recommendations have been accepted.
The new Code will do what good industry codes seek to do: commit to standards and specific practices which go over and above legislative and regulatory requirements and as a result improve customer
outcomes.
