The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry cast a dark cloud over much of the Australian insurance sector when the final report was released in February 2019. Widely viewed as an indictment of unethical practices, it set a mandate for cultural transformation across the entire financial services industry.

Commissioner Kenneth Hayne’s recommendations for general and life insurance included a potential ban on commissions (pending an Australian Securities and Investments Commission [ASIC] review in 2021), the removal of claims handling exemptions to ensure they are subject to ASIC oversight, changes to the duty of disclosure and legal enforcement of some provisions of industry codes.

While such regulatory changes look set to lift standards across the sector, the insurance industry is also taking steps to increase professionalism from within.

REVISING THE GI CODE OF PRACTICE

Changes to the General Insurance Code of Practice were in motion prior to the release of the royal commission’s final report after the board of the Insurance Council of Australia (ICA) initiated a review in February 2017.

The review’s final report, released on 26 June 2018, included 30 recommendations that reflected key priority areas. These included strengthening the governance of product design and distribution, amending standards on claims investigations and assisting consumers experiencing vulnerability, such as family violence, financial hardship, physical or mental health conditions and exposure to catastrophic events.

Premium

You need to login to access this

Login

What are CIP Points? About ANZIIF Membership