The Australian Consumers Insurance Lobby Inc. (ACIL) has recently engaged with the Australian Securities and Investments Commission (ASIC) to voice significant concerns about the recently released General Insurance Code of Practice Independent Review Initial Report, as well as the Use of Expert Reports Industry Best Practice Standard. The meeting focused on highlighting gaps in the proposals that ACIL believes fail to adequately address critical consumer issues associated with expert reports in insurance claims processes.
The Flood Failure to Future Fairness report (click here) from the House of Representatives strongly reinforces the concerns ACIL has been raising, particularly regarding the inadequate standards governing expert reports in insurance claims. The report outlines systemic problems like inconsistent expert reports, poor communication, and delays in claims resolution—issues that closely align with ACIL’s advocacy. Both the report and ACIL emphasise the urgent need to revise the General Insurance Code of Practice to better protect consumers from the negative impact of flawed reports and unfair claims handling processes. ACIL applauds the strong recommendations put forward by the House of Representatives, particularly the call for heightened regulatory oversight and improved accountability standards for expert reports. The report echoes ACIL’s long-standing argument that the current proposals for expert reports fail to address the core issues faced by consumers, and that further reforms are necessary.
ACIL Chairperson, Tyrone Shandiman, remarked, "When we spoke to ASIC, we made it clear that the proposed standards simply do not go far enough to address the significant consumer issues related to expert reports. The current proposals guide only how insurers should use expert reports but don't deal with the source of the problem—the expert reports themselves. Insurers are not experts; how are they to know what appropriate evidence or investigation methods are, or what the building codes are?"
Shandiman referenced the findings of the General Insurance Code Governance Committee's Thematic Inquiry into Making Better Claims Decisions, which "found the quality of reports prepared by experts engaged by subscribers to be poor," adding, "We saw too many reports that failed to provide a clear and demonstrable link between the cause of damage and the loss. We did not always see sufficient evidence to justify the assessments."
ACIL's Key Requirements for Code Revisions
ACIL is advocating for updates to Section 5 of the Code to impose greater standards directly on experts, rather than relying solely on insurer oversight. " We have seen far too many cases where a single sentence, or even a single word in an expert's report, becomes the basis for an unfair denial—leaving consumers in financial ruin, stripping away their livelihoods, destabilising families, and causing severe mental health struggles," said Shandiman. "The stakes are too high to allow such carelessness. The devastating consequences of an erroneous expert report demand that both experts and insurers uphold far stricter standards to truly safeguard consumers."
ACIL also noted that the Insurance Council of Australia (ICA) is seeking ASIC’s sign-off on the revised Code of Practice. Shandiman warned, "It would be detrimental for consumers if ASIC endorsed a code that does not properly address the well-publicised issues surrounding expert reports. An endorsement of this kind could potentially leave significant gaps in consumer protection, perpetuating existing challenges in claims management."
Call for Action
ACIL is urging the ICA to address these issues within the revised Code of Practice to ensure a fairer process for insurance consumers. "ASIC's prior statements indicate that the regulator is closely monitoring claims handling practices in the industry, making it essential for the ICA to take these concerns seriously and ensure consumers are not left disadvantaged by the gaps in oversight," Shandiman added. ACIL remains committed to advocating for stronger consumer protections and will continue to advocate regulatory bodies like ASIC & ACCC to push for the necessary changes.
Further Analysis
ACIL has expressed the following concerns to the Insurance Council of Australia (ICA). While ICA believes their Use of Expert Reports Industry Best Practice Standard addresses our issues with expert reports, we emphasise that the standard only governs how insurers use these reports, not the root of the problem—the expert reports themselves. The specific concerns are outlined further below.
Standards for Service Suppliers
ACIL is concerned that the current proposals do not impose sufficient obligations on service suppliers to:
Provide adequate evidence to substantiate their conclusions, ensuring that their opinions are well-supported and verifiable.
Accurately cite and apply relevant building codes, standards, and regulations to each case.
Consider previously certified performance solutions when reporting on defects.
Conduct thorough and comprehensive investigations relevant to the issues they are assessing. This includes undertaking additional investigations where necessary to ensure accuracy, particularly in complex cases.
Clearly state when findings are inconclusive, avoiding a bias toward conclusions that favour the insurer, such as exclusively identifying excluded causes of damage.
ACIL believes that Part 5 of the Code should be updated to include these standards for anyone providing expert opinions, allowing the Code Governance Committee to have oversight of experts as well.
Standards for Insurers
Furthermore, the current proposals do not address the concerns ACIL raised with in our recent meeting regarding insurer practices, including:
Directive Guidance: Instructions that may unduly influence expert opinions.
Vendor Contracts: Performance measures that incentivise the denial or reduction of claims, along with potential conflicts of interest or contractual terms that contradict the Code or Best Practice Standards. This can include instances where a contract requires a contractor to prioritise the insurer’s interests or prohibits them from making critical statements, it could compromise their ability to provide an impartial and objective report.
Process for Disputing Expert Reports
ACIL is also concerned about the financial burden on consumers who wish to dispute expert opinions. The current process often requires consumers to pay for alternative experts to challenge findings, creating a power imbalance. Many consumers are unable or unwilling to risk incurring significant costs to dispute a report, leaving them disadvantaged. ACIL believes that consumers should have the right to dispute an expert's findings at the insurer's expense—this would create greater accountability for experts to provide fair and unbiased opinions.
