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1 June 2020
The General Insurance Code Governance Committee has called on insurers to lift standards and overhaul processes after finding some subscribers have been “adopting a lax attitude” toward identifying breaches.
A committee inquiry has found weaknesses in compliance monitoring and warns some firms are “reverting to blackletter law” in response to the Hayne royal commission, in an approach that is not within the spirit of the code.
The committee today released a report, Living the Code: Embedding code obligations in compliance frameworks, which it says builds on the work of the royal commission and provides guidance on helping insurers adhere to their commitments and improve performance.
“Our own motion inquiry revealed that not all boards examine breach data and that in some cases, breach reporting is not reaching the boards of some insurers,” Chairman Lynelle Briggs says.
The report includes 22 recommendations to promote governance processes that drive consumer-centric cultures focussing on fairness, honesty and transparency.
“The fundamental purpose of insurance is to protect people against adverse and unexpected events,” Ms Briggs says. “This has never been more evident than the current worldwide experience of the effects of the coronavirus pandemic.”
The committee says size or foreign ownership are not excuses for a lack of oversight by boards or senior decision makers.
It calls for firms to make it easy for staff to report incidents and code breaches, and says non-financial performance metrics should be applied at all levels of an organisation.