On 15 February 2012, the Insurance Council of Australia announced that it had approved certain revisions to the General Insurance Code of Practice. A number of the revisions were made in response to the 2011 natural disasters.


The amendments apply to all claims received on or after 1 July 2012, and for insurance contracts written from 1 July 2012. A copy of the revised Code is available here.

What are the key amendments?

The key amendments are designed to provide greater clarity and certainty for consumers in relation to time frames for claims handling, the completion of external expert reports (including the provision of such reports to consumers), and allowing for a right to lodge a complaint to challenge the insurer’s determination as to policy coverage.

The amendments also clarify that the Code will apply in the aftermath of a catastrophe or disaster, and provide additional training requirements for employees.

Claims handling

All claims

General insurers who deny any claim must now inform the client of their right to:

  • ask for copies of information about the client that the insurer relies upon in assessing the claim; and
  • request a review of any decision the insurer takes to decline to release such information.  

Specified classes of policies

The Code also includes a new provision dealing with the handling of claims made under any motor vehicle, home building, home contents, sickness and accident, consumer credit or travel insurance policy. In respect of these classes of general insurance policies:

  • unless exceptional circumstances apply, where a claim is made under such a policy and further information, assessment or investigation is required:
  • the insurer will make a decision to accept or deny the claim within four months of receipt of the claim (if exceptional circumstances apply, the insurer will make a decision within 12 months);
  • if the insurer does not make a decision, it will inform the client in writing of the client’s right to:
    • access to the insurer’s internal dispute resolution process; and
    • take any complaint in relation to the client’s claim to an external dispute resolution scheme;  
  • if the client asks whether the policy provides cover for certain loss suffered, the insurer will:
  • ask the client whether they would like to lodge a claim;
  • explain that if the client does lodge a claim, the question of coverage will be fully assessed; and
  • not discourage the client from lodging a claim even if the insurer is of the view that it is unlikely to be accepted;  
  • if the insurer engages an external expert to provide a report which is necessary to assess the client’s claim, the insurer will instruct the expert to provide their final report within 12 weeks. If the external expert fails to provide a final report within this period, the insurer will inform the client and keep them informed of progress in obtaining the report.

“Exceptional circumstances” is defined as situations where:

  • the claim arises from an extraordinary catastrophe or disaster as declared by the Board of the Insurance Council of Australia;
  • the claim is fraudulent or the insurer suspects fraud;
  • there is a failure by the client to respond to the insurer’s reasonable inquiries or requests for documents or information concerning the claim;
  • there are difficulties in communicating with the client in relation to the claim due to circumstances beyond the insurer’s control; or
  • the client requests a delay in the claims process.  

Employee training

Insurers are now required to ensure that:

  • their employees receive adequate training to deal with clients professionally; and
  • training of employees includes understanding of the client’s situation, particularly in the aftermath of a catastrophe or disaster.  

Responses to catastrophes and disasters

The previous version of the Code contained provisions acknowledging that insurers may not be able to meet all standards of the Code following a catastrophe or disaster, and they may establish their own internal processes for responding to catastrophes and disasters.

These provisions have been removed from the revised Code, to clarify that insurers must comply with the Code even after a major catastrophe or disaster.

Further proposed amendments

On 4 May 2012, the Insurance Council of Australia announced an independent review of the General Insurance Code of Practice.

The independent review is required to consider the outcome of the National Disaster Insurance Review, the Queensland Floods Commission of Inquiry and the House of Representatives Standing Committee on Social Policy and Legal Affairs’ investigation into the insurance industry. The Insurance Council of Australia may make further amendments to the Code in response to any recommendations made by the independent review.