A new General Insurance Code of Practice, with a redrafted Code that is consumer-centric, modern, fit-for-purpose and contractually enforceable is in the making for the insurers in Australia.
The new draft code being put in place by the Insurance Council of Australia (ICA) and insurers will replace the current code that was developed in 1993 and has been reviewed and amended on multiple occasions in its 30-year history.
According to a media release by ICA, the process of updating the 2020 Code commenced earlier this year following the completion of an independent review. The Code needs to be clear, concise, and relevant and an important document for consumers to understand their rights but stakeholders and users report that the current Code can be difficult to understand and doesn’t reflect contemporary challenges faced by consumers and insurers.
After engagement with major 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.
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 and the Code is expected to be lodged with the Australian Securities and Investments Commission for approval mid-2026. The current Code will remain in place in the interim.
Improving consumer protection and customer experience is the main 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 Australian Competition and Consumer Commission in the second half of 2025 to authorise insurers to use standard policy definitions relating to home maintenance and wear and tear.
ICA CEO Andrew Hall said, “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.”