The Australian Securities and Investments Commission has warned insurers against losing consumer protections while simplifying their code of practice in a major rewrite.

Commissioner Alan Kirkland says “simple cannot be code for stripped out” and the regulator has held constructive discussions with the Insurance Council of Australia on its redraft.

“That’s a completely valid decision with a document that’s been amended many times,” he told the ICA annual conference in Sydney last week. “If you can express it in simpler and clearer terms, that can be a good outcome for consumers and industry, but we just need to make sure that in that process of simplification, we’re not actually removing quite important consumer protections.”

Mr Kirkland welcomed the decision to make the code enforceable by contract, but said if its provisions do not improve protection, it will be a step back.

“We do expect, with code reviews, to see improvements in overall consumer protection over time.”

He challenged insurers over the next year to get the code right, make it count and commit to a document that will make a difference to customers.

Financial Services Minister Daniel Mulino told the conference that seeking ASIC approval for the document and making it enforceable is an important step

“It tells consumers that this is not just words on a page, it’s backed by real accountability,” he said. “I think that will build confidence, not just in individual businesses, as important as that is, but also in the industry as a whole.”

Dr Mulino urged insurers to continue making improvements in parallel with the code rewrite.

ICA’s latest catastrophe resilience report says public consultation on the document is expected in the first six months of next year, followed by lodgement with ASIC in the second half.  

Chair Steve Johnston said on Thursday that rewriting the code and establishing enforceability mechanisms will be a defining moment for the industry.  

“It will necessarily involve widespread consultation, goodwill and a preparedness for our members to accept some give and take,” he said. “Precision will be a high hurdle for the industry. However, a meaningful advancement and contemporisation of our practices, with enforcement provisions built in, will be a worthy objective.”

Development of the code will be at the forefront of the ICA work program for the remainder of this year and through 2026, he said.