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The new General Insurance Code of Practice came into effect on 1 July 2021, amending the 2015 version which was first introduced in 1994. The changes have been introduced following an industry-wide review and have the stated aim of strengthening policyholders’ rights.


The Code is a voluntary Code of Practice maintained by the Insurance Council of Australia under which ICA members agree to follow certain principles and standards in providing general insurance services1.

According to the ICA, the Code is intended to be a positive influence across all aspects of the general insurance industry including product disclosure, claims handling and investigations, relationships with people who are experiencing vulnerability, and reporting obligations. In many respects it is aspirational - for example, it requires insurers to provide “value, transparency and fairness of products and services”.  

Recent amendments and what they mean for policyholders

Some of the changes require insurers to take extra care with vulnerable customers which may include arranging additional support or assistance, developing internal processes and procedures that take into account customers who have experienced domestic violence or have a mental health condition, and taking a flexible approach to supporting customers to meet identification and verification requirements and to apply for financial hardship support.

Other changes are aimed at improving policyholders’ experiences when it comes to handing complaints, although importantly the Code only governs the behaviour of insurers in response to complaints by individuals and small businesses – large policyholders will still need to take their own advice from their brokers or lawyers on how to resolve complaints about their insurer.

For individuals and small businesses, the new Code requires a streamlined approach to the complaints process which involves:

  • The policyholder is to be informed about the contact details of the person assigned to handle the complaint, and that person must have appropriate authority to handle the complaint.
  • The policyholder must be informed every 10 Business Days about the progress of the complaint, and a decision must be made within 45 days. The decision will generally be communicated in writing.
  • The policyholder retains the ability to refer the matter to the Australian Financial Complaints Authority if they remain unsatisfied with the outcome. AFCA rulings are binding on insurers, but not the policyholder (who retains the right to commence court proceedings).

The independent Code Governance Committee will continue to monitor and enforce the Code, and has powers to impose sanctions on insurers for non-compliance including payment of compensation, although only if they do not consider it more appropriate that ASIC or another agency investigate the alleged conduct.

In the Post-Hayne Royal Commission era where there has been heightened community scrutiny of insurers and financial services providers, any Code by which insurers agree to improve standards is welcome. No doubt the majority of insurers have genuine intent to pursue the objectives of the Code, which include an acknowledgement that every contract of insurance is based on the (reciprocal) duty of utmost good faith, but it will be the actions by all insurers that will determine whether public faith in the industry can be restored.

1The Code does not cover: Workers compensation, Marine, Medical indemnity, motor vehicle injury insurance, domestic builders insurance or domestic builders warranty/indemnity insurance,  reinsurance, life insurance or health insurance.

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Anne Hoffmann

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Mark Darwin

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