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ACCC approves ICA tool to process BI claims

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The Australian Competition and Consumer Commission (ACCC) has granted interim approval for insurers to use a web-based tool developed to help assess a possible influx of COVID-related business interruption (BI) claims following the conclusion of the second test case.

The Insurance Council of Australia (ICA) has applied for clearance to allow members to enter a user agreement to access the DSpark Tool, which aims to provide an easy method to search for the location of COVID-19 cases and relevant public health orders.

In its application ICA says it’s anticipated there will be an influx of BI claims relating to COVID-19 should decisions in the test case come down in favour of policyholders. An appeal is currently being considered by the Full Court after justices reserved their decision last month.

“Interim authorisation will allow participating members to test and develop the DSpark Tool with the aim of having it fully available for use when the BI test case is determined, expected by the end of 2021 or shortly thereafter,” the ACCC says.

The ACCC says a submission from the Australian Financial Complaints Authority (AFCA) supports development of the web-based tool.

“AFCA considers that the DSpark Tool is required urgently in order to ensure COVID-19 related BI claims are handled fairly, consistently and efficiently,” it says.

The tool will use public health data to identify whether there have been COVID-19 exposure sites at a premises or within a specific radius and will enable insurers to identify relevant state and territory public health orders that applied to a policy holder’s business, based on the location and date of the orders.

Information collated by the DSpark Tool will also be made available by the insurers to insureds to assist them with their claims, the ACCC decision says.

The Federal Court judgment on the second test case, delivered by Justice Jayne Jagot in October, was decided largely in favour of insurers. The Full Court has since completed the appeal hearings in an expedited process, with the decision still awaited. A further appeal application could also be made to the High Court.

The ACCC says the proposed use of the tool does not extend to any information sharing or agreement between participating members as to their individual claims assessment processes, pricing terms, or future BI policies.

“Participating members will continue to assess BI claims they receive, and otherwise deal with customers, independently of each other,” it says.

The ACCC says the tool involves the aggregation and supply of publicly available data in order to reduce the amount of information required from policy holders and will likely reduce the cost and time claimants need to spend on the process and help insurers to provide a more efficient response.

“It is also likely to improve the transparency of the claims handling process and may reduce the number of complaints insurers receive,” it says.

The ACCC will hold a public consultation on a draft determination in January/February and is set to deliver its final determination in February/March.

ICA sought authorisation for use of the DSpark Tool up to October 1 2023 to allow sufficient time for COVID-19 related BI claims to be assessed and determined, once the test case has been finally decided.