The corporate regulator needs to make it easier for insurers to identify complaints trends and issues as part of changes to the internal dispute resolution scheme, a consumer group says.

The Financial Rights Legal Centre says the Australian Securities and Investments Commission (ASIC) should add a number of sub-categories to the proposed list of complaint codes to make it easier for insurers to single out and deal with emerging problems.

“Complaints about insurance claims may be high and increasing but they may be made up of 90% complaints about delays and 10 per cent about cash settlements, depreciation of assets, disputes over quantum or excessive information requests. If complaints about insurance claims are decreasing but complaints about delays are increasing – this key trend will be potentially lost,” the submission says.

“The 10 broad categories may be so broad that they may be rendered meaningless and will not assist ASIC or firms in identifying emerging issues.”

While each of the complaints’ issues can be described freely by the firm – there is a 4000-character limit – both the firm and ASIC will have to manually read thousands of complaints, or use potentially unreliable AI to interpret it, to understand trends, it says.

The maximum complaint timeframe for internal dispute resolutions should be reduced to 30 days for all licensees and firms should provide a genuine estimate of how long they expect any consideration of the complaint to take, the submission says.

The Centre also wants ASIC to recognise that requests for information (IR) often lead to a complaint and say the 30-day timeframe should be counted from when the IR is made if it turns into a complaint.

Complaints made via social media should be also included in IDR processes, the Centre says.

It’s increasingly common and effective to raise complaints via social media and have them addressed that way, the Centre says.

The Insurance Council is taking a tally of members; views before responding to the ASIC consultation.

The Council is advocating that financial firms are provided with ample time to implement ASIC’s proposed changes, and that the collection and publication of disputes by the regulator should be guided by “relevant metrics and context”.

“This would ensure dispute information is relevant to both consumers, financial firms and the financial services industry,” it says.