The Australian Consumers Insurance Lobby Inc. (ACIL) has formally requested the Australian Securities and Investments Commission (ASIC) and the General Insurance Code Governance Committee (CGC) to investigate whether recent issues in insurance claims handling represent isolated incidents or point to broader systemic concerns within the industry.
The request follows a high-profile case involving a rejected insurance claim and subsequent apology by the insurer. This case, which has garnered media attention, highlights potential flaws in the oversight of expert reports and raises questions about insurers’ ability to manage claims fairly and professionally.
ACIL Chairperson, Tyrone Shandiman, stated, “This case underscores the need for ASIC and the CGC to thoroughly review how insurers rely on external expert opinions and whether the current standards truly protect consumers. Our concern is that the current Expert Report Standard places too much responsibility on insurers to ensure experts act appropriately. This approach is fundamentally flawed, as insurers lack the expertise to effectively monitor or assess the work of these professionals. This creates a convenient layer of plausible deniability for insurers when issues arise.”
The ACIL has recommended a review of the recently updated Use of Expert Reports Standard in light of this case, to determine whether further enhancements are necessary. Specifically, ACIL is advocating for:
Stronger accountability measures to ensure experts adhere to higher professional standards.
A reassessment of the current framework to ensure insurers’ reliance on expert opinions does not disadvantage policyholders.
Greater scrutiny of the standards to determine if ASIC or the CGC should make further recommendations to strengthen the General Insurance Code of Practice.
ACIL’s call for action aims to ensure the insurance industry upholds the highest standards of transparency and fairness in claims handling. “These investigations are critical to restoring consumer confidence and ensuring policyholders are treated with the fairness they deserve. Insurers involved in systemic violations, should be required to initiate remediation programs for affected customers” Mr. Shandiman concluded.
