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  • Introductory video

    View Rob Whelan's (CEO, Insurance Council of Australia), summary of some of the key features of the General Insurance Code of Practice.

    Pay particular attention to:

    • some of the key changes in the latest instalment of the Code
    • how changes to signatory obligations align with the Code's ethos of creating an industry benchmark
    • the entity now responsible for monitoring Code compliance.

    Note: Video originally filmed on July 1, 2014 and used with permission from the Insurance Council of Australia.

    View on YouTube.

  • Checkpoint

    List two of the many key changes Rob Whelan highlighted about the revised General Insurance Code of Practice in the following space.

    How do changes to signatory obligations align with the Code's ethos of creating an industry benchmark?

    Which of the following entities did Rob state was responsible for monitoring Code compliance?

  • Why A Code of Practice?

    The insurance sector is governed by both government legislation and industry regulation.

    Examples of Federal Government Acts with a significant impact on daily dealings with customers in general insurance in Australia include the:

    A code of practice is a form of industry regulation which can provide a viable alternative to government legislation in relation to achieving acceptable industry standards for customer service.

    In addition, a code of practice is usually more flexible and less costly to implement. A code of practice can also alleviate the threat of rigid industry regulation imposed by the government.

    Many professions, industries and government departments have established codes of practice to raise their service standards.

    A code of practice is essentially a self-regulatory, 'living' code. This means the industry (not government) is responsible for its enforcement, as well as the code's continued maintenance.

  • Insurance product coverage by the code

    According to the General Insurance Code of Practice website, the Code covers nearly all types of general insurance.

    The Code does not apply to reinsurance (insurance for insurers) and insurance with defined rules under other government statutes:

    • life insurance products issued by life insurers (Life Insurance Act 1995)
    • health insurance products issued by registered health insurers (Health Insurance legislation)
    • medical indemnity insurance for health care professionals (Medical Indemnity (Prudential Supervision and Product Standards) Act 2003)
    • compulsory third party (CTP), including linked driver protection cover (State and Territory Government regulation)
    • workers compensation (State and Territory Government regulation)
    • marine insurance (other than pleasure craft) (Marine Insurance Act 1909).

    Note: Under a co-insurance arrangement, if one or more of the insurers has not adopted the Code, then that policy is not covered by the Code.

  • Definitions of 'the customer'

    There are sections of the Code that apply only to the to retail insurance market. The retail insurance specific sections include:

    • Buying insurance (Section 4)
    • Standards for our service suppliers (Section 6)
    • Claims (Section 7)
    • Catastrophes (Section 9)
    • Complaints and disputes (Section 10).

    All remaining sections apply to both retail and wholesale insurance.

    This differs from the Corporations Act which does make this distinction in terms of protection provided by that Act to insurance customers.

    The Corporations Act contains the following definitions.

    (S761G) defines a retail client as either:

    • an individual who seeks to acquire specified classes of insurance; or
    • a small business entity (e.g. a company, business or partnership) who seeks to acquire specified classes of insurance for use in connection with a small business.

    S761G(12) defines a 'small business' as a business employing less than:

    • 100 people if the business is for, or includes, the manufacture of goods
    • otherwise, 20 people.

    761G(4) defines a 'wholesale client' as:

    • anyone (other than a retail client) who is provided with, or acquires, a financial product or service.

    Within these definitions, it is the type of insurance that is important, regardless of whether the client is an individual or otherwise. For a client to be classed as retail, the insurance must be one of the classes listed in the legislation. The classes listed in this legislation, with some minor differences, are broadly in line with the personal lines classes of insurance covered by the Code.

    The Code provides only that:

    • the insurance product is one that is covered by the Code; and
    • the customer is a customer of a signatory to the Code.

    However, the Insurance Council of Australia (ICA) and the Financial Ombudsman Service (FOS) will consider options to minimise any unnecessary Code compliance administration for those whose business is strictly limited to wholesale insurance.

  • Checkpoint

    What is the difference between a Code customer and a retail customer as defined by the Corporations Act?

  • The Code Governance Committee

    Picture of board room, representing the Code Governance Committee (CGC)

    The Code introduces a new governance framework, the Code Governance Committee (CGC), to ensure the effective monitoring and enforcement of Code compliance.

    The CGC is a separate and independent entity from the ICA, the FOS and from Code subscribers (individual insurers).

    Learn more about the CGC.


An industry code can be more flexible than government legislation because:


Types of insurance covered

Nearly all types of general insurance are covered by the Code of Practice. These include: