The revised General Insurance Code of Practice came into effect on 1 July 2014.  

Updated and expanded to 15 sections, the introduction of the revised code follows from the fast-tracked independent review conducted by Ian Enright. The revised code responds to industry concerns arising out of the spate of recent natural disasters in Australia, and the adequacy of code standards in areas including buying insurance, claims handling, employees and authorised representatives, information and education, and complaints and disputes. 

Apart from re-thinking the application of its standards, the code also provides for an independent Code Governance Committee (CGC) to take over the work of the Financial Ombudsman Service (FOS) in code monitoring and enforcing code compliance of members.

Members have until 1 July 2015 to transition to the revised code.  This will require an overhaul of existing practices although most of the changes have been anticipated for some time and many insurers are already compliant.


Perhaps the most significant change to the code is the distinction between retail and wholesale insurance products (as defined).

The definition of ‘retail’ insurance adopts the Corporations Act as follows:

…a general insurance product that is provided to, or to be provided to, an individual or for use in connection with a Small Business, and is one of the following types:

  1.  motor vehicle insurance product (Regulation 7.1.11);
  2.  home building insurance product (Regulation 7.1.12);
  3.  home contents insurance product (Regulation 7.1.13);
  4.  sickness and accident insurance product (Regulation 7.1.14);
  5.  consumer credit insurance product (Regulation 7.1.15);
  6.  travel insurance product (Regulation 7.1.16); or
  7.  personal and domestic property insurance product (Regulation 7.1.17), as defined in the Corporations Act 2001 and the relevant Regulations.

Small business means:
…a business that employs:

  1. less than 100 people, if the business is or includes the manufacture of goods; or
  2. otherwise, less than 20 people.

Wholesale Insurance is defined as a general insurance product covered by the code which is not retail insurance.

All of the code standards apply to retail insurance.

What’s new

Distinctions regarding retail or wholsesale insurance aside, the new code calls for increased code promotion by the Insurance Council of Australia (ICA) and for active promotion by code members.  Financial hardship standards now apply to an insured or third party beneficiary who owes money (other than for the payment of premiums).  Where code members contract with other persons who are not authorised representatives but who are licensed by ASIC to sell insurance products, consumers are encouraged to report any concerns about these persons directly to the CGC.

Retail only standards

Buying insurance.  Code members need to adopt the use of plain language in correspondence with the insured, and provide written notices regarding non-payment of premium instalments and cancellations of an instalment policy.

Service Suppliers.  Formerly referred to as service providers, any contracting between code members and investigators, loss assessors or  adjusters, collection agents or claims management services (including brokers who manage claims on behalf of an insurer) needs to reflect relevant code standards and provide services on behalf of the insurer efficiently, honestly, fairly and transparently.

Claims.  Timeliness of claims handling is not a novel requirement.  But subject to the complexity of a claim, the code expressly requires the adoption of timetables for claims handling.

Catastrophes.  Catastrophes are events declared by the ICA, including fire, flood, earthquake, cyclone, severe storm and hail, resulting in a large number of claims and involving multiple insurers.  Efficiency, not speed, is the order of the day for code members.  The timeframe for review of property claims flowing from catastrophes has also been extended, from 6 to 12 months. 

Complaints and Disputes. Code members who are also members of the FOS external dispute resolution scheme (as required for retail insurance products) should note their obligations under the FOS scheme relate to a greater range of insurance products.

A printable PDF version of the code is available here and an online version is viewable here.