The Australian Securities and Investments Commission should seek further feedback on the new insurance code of practice, as the version submitted for approval falls short in key areas, consumer groups say.

Financial Rights Legal Centre principal for policy development Drew MacRae says ASIC consulted publicly on a banking code and should do the same for the insurance document, given rising complaints to the ombudsman, inquiry recommendations and ongoing concerns.

“It’s up to ASIC to weigh all that up,” he said. “I think it’s incumbent on them to do a public consultation, and I would be surprised if they don’t.”

Mr MacRae says, based on a preliminary look, the submitted code appears to address some core concerns around governance and independence, but issues in other areas are unresolved.

“On first blush, it doesn’t look like they’re taking the steps they need to take in terms of a substantive uplift on minimum standards to provide better claims handling for consumers,” he told insuranceNEWS.com.au.

The Insurance Council of Australia has for the first time submitted its code to ASIC, which in December released the updated Regulatory Guide 183 on approvals.

“The redrafted code incorporates changes that will deliver genuine benefits, while ensuring the code remains practical and proportionate,” CEO Andrew Hall said in a consultation response document.

“In doing this, we have also considered the importance of maintaining affordable and accessible insurance.”

Mr Hall says ICA considered that measures that appear to enhance customer outcomes can, in some circumstances, increase complexity, reduce flexibility, increase costs or create barriers to participation.

The Association of Building and Engineering Consultants says the latest code is a step forward and provides a clearer delineation in the roles of experts, loss adjusters and claims fulfilment providers.

CEO Tony Libke says ICA has shared with AiBEC a revised copy of the Experts Best Practice Standard, underpinning their role.

“An AiBEC working party is being formed to review and offer feedback to ICA on the revised standard,” he said.

The Australian Consumers Insurance Lobby says the code fails to address concerns about how insurers appoint, instruct and remunerate experts.

“The industry has rules about how expert reports should be written, but it still needs stronger rules about the commercial arrangements behind them,” chair Tyrone Shandiman said.

ACIL acknowledges substantial improvements since the previous draft but says ASIC should not endorse a code that leaves significant consumer protection issues unresolved.

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