When the two-year anniversary of the Hayne Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry came around in February 2021, many Australian news outlets lamented how little progress had been made. 

However, as new legislation rolls out, it’s all systems go for insurers — especially for their customer service teams.

REGULATION ROLLOUT

‘Going back to the heart of the issues before the royal commission, it is clear that there were failures to appropriately respond to customers’ needs,’ says Bhrajna Kalaiya, a director in Deloitte’s Governance, Regulation and Conduct practice and an insurance sector specialist. 

‘For example, claims handling issues highlighted in the case studies emphasised both the importance of certain moments for customers and the Australian Securities and Investments Commission’s limited ability to intervene.’

Customer service teams operate on the front line, and so they potentially have one of the most important roles to play in converting regulation into action. 

‘Where insurers prioritise good conduct outcomes and effectively manage non-financial risk, they will be better able to comply with complex regulatory regimes in a robust manner that also fosters a positive culture,’ says Kalaiya.

Insurers in New Zealand have also closely followed the regulatory changes resulting from the royal commission. ‘A number of insurers operate in both New Zealand and Australia, so they’ve kept across what has happened,’ says Tim Grafton, CEO of the Insurance Council of New Zealand (ICNZ). 

‘Around two years ago, the Reserve Bank of New Zealand and the Financial Markets Authority [FMA] undertook reviews of how life insurers and banks operate. General insurers also did a gap analysis and were required to present their findings and recommendations on conduct risk to their boards.’

The outcome of the reviews was the Financial Markets (Conduct of Institutions) Amendment Bill, which is currently in the New Zealand Government’s hands and going through targeted consultation with stakeholders.

Independently, ICNZ first developed a Fair Insurance Code for general insurers in 2006 and released a revised Code in March 2020. Grafton says: ‘It puts customers at the heart of what we do. We are also aligned with the FMA’s Good Conduct Guide, and after the Canterbury earthquakes, we worked with the Human Rights Commission on guidance for the prioritisation of vulnerable customers in a natural disaster.’

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