NEWS

Insurance Council goes into hyperdrive for vulnerable Australians

The impact of COVID-19 has driven the Insurance Council of Australia (ICA) to announce changes to the implementation of the new 2020 General Insurance Code of Practice (Code) on 7 May 2020.

The devastating impact of the COVID-19 pandemic has resulted in insurers fast-tracking their support for customers experiencing vulnerability, including financial hardship. Parts 9 and 10 of the Code, which deal with supporting customers experiencing vulnerability and financial hardship, respectively, will come into operation 6 months earlier (to July 1, 2020) than was initially anticipated.

Bringing these parts of the Code forward by 6 months will be facilitated by insurers implementing temporary measures, focusing on furthering the consumer outcomes intended by these parts. This dynamism and flexibility to the exigencies of life demonstrated by the ICA and the signatories to the Code will serve the interests of the community at large.

Whilst taking quantum leaps to further the interests of the community by fast-tracking the implementation of parts 9 and 10 of the Code, insures have not been left unscathed by the impact of COVID-19 and the natural disasters that have wreaked havoc on communities across the nation.

The cost of insurance claims from the natural disasters that occurred over this past summer has exceeded $5.19 billion, as at 28 May 2020.

As a result of the significant financial pressures on insurers and increased volume of claims due to COVID-19, the ICA has agreed to give insurers more time to fully implement the Code, save for parts 9 and 10 of the Code, as discussed above. Specifically, the ICA has approved the deferral of the balance of the Code by 6 months to July 1, 2021. Of course, insurers are encouraged to implement the Code as soon as possible.

The ICA made the following salient remarks, “like most businesses, insurers are deeply affected by the pandemic. They need to concentrate on providing urgent services to their customers. The industry’s focus is on ensuring their resources are harnessed to help all customers, including those who are experiencing financial hardship, vulnerability and family violence during the COVID-19 pandemic and post-natural disasters.”

Unquestionably, the crises that have confronted the nation have placed a significant burden on the shoulders of insurers; however, the versatility shown by the ICA to fast-track parts of the Code for the benefit of the community, whilst deferring other non-essential parts of the Code should place the Australian insurance industry in a good position in these uncertain times.

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