The general insurance code of practice was developed as a voluntary code by the Insurance Council of Australia. It aims to provide protection for policyholders and raise the standards of customer service.
The code requires all employees to understand their obligations by offering training in the latest procedure. The first General Insurance Code dates back to 1995 with its update in 2005. The code aims at reducing disputes, promoting a good relationship between agents, consumers, and insurers. It also improves customer service standards across the industry and provides for a non-litigious low-cost mechanism for consumer redress.
The updated code contains the provision of consumer information and benchmarks concerning claims and complaints procedures. The code does not apply to reinsurance, health insurance issued by a registered health insurer, life insurance issued by a life insurer, medical indemnity insurance, compulsory third party insurance, marine insurance, and workers compensation. Violating this code can be reported to the CEO of the insurer related to the affected party. The CEO`s failure to take necessary action calls for further reference to the Secretary-General of the General Insurance Council that should take appropriate action to remedy the matter. All stakeholders should ensure insurers maintain a high standard code of conduct that the code clearly outlines. The insurer also has the responsibility of sincerely examining a complaint and take prompt action.
Areas Covered By General Insurance Code Of Practice
The code clearly outlines the main selective coverage areas; including dealing with claims, handling complaints, providing information, responding to disasters, and selling insurance.
Handling Complaints – A customer who is not happy with a service or product gets an insurer who agrees to advise them on how they can file a complaint. They also offer help on how to respond to such a complaint within a specified period.
Providing information – It involves the insurer agreeing to provide up-to-date, accurate information on general insurance matters. The information included should be easy to read and understand.
Responding to disasters – Customers with claims resulting from a natural calamity receive help from the insurer who agrees to a cooling-off period. It provides the claimant with sufficient time to analyze the true extent of their losses and damage.
Handling claims – Customers with claims get an assurance from the insurer who agrees to respond instantly within ten business days. The condition does not apply to situations where further investigations are required. The insurer agrees to make advance payments or fast-track the claim where financial hardship is a factor.
Selling insurance – The insurance provider at this level agrees to refer the customer to relevant bodies for more information, provide customer reasons if an application is refused, and uses relevant information when assessing an insurance application.
Code Of Conduct Imposed On Insurers
An insurer must not use unlicensed sale channels or intermediaries that revolve around legitimate sales channels. The use of unprofessional sales methods will attract penalties.
Insurers should report any cases of improper conduct of brokers to the authority. They should also report non-compliant customers with the IRDA guidelines on insurance and reinsurance of general insurance risks by another insurer.
An insurer who takes over on a client who decides to move insurance from one insurer to another should check with the previous insurer concerning the claims experience and other matters relevant to underwriting. The previous insurer should provide well-detailed information.
An insurer with a complaint of unfair competition should report the matter to the Secretary-General that calls the two for a meeting. The two insurers look into the matter and ensure that competition remains technically sound footing and fair.
