INQ339

TitleLong
Flood failure to future fairness - Report on the inquiry into insurers' responses to 2022 major floods claims
INQAuthor
House of Representatives Standing Committee on Economics
Year
InquiryType
DisasterType
State
Status

Recommendations for this Inquiry

INQ-ref REC-UID CODE SubCode SrcNUM Recommendation
INQ339 REC339-4446 E - Agency Organisation 32 - Doctrine, standards, and reform Recommendation 44

The Committee recommends that insurers improve their processes to facilitate the escalation of cases that remain unresolved after 12 months to a more experienced case manager.

INQ339 REC339-4458 A - Responsibility 38 - Agency/Department Reporting Recommendation 56

The Committee recommends that for each declared event, insurers be required to report the number of unresolved cases after 12 months to the Australian Securities and Investments Commission and the overarching strategy for resolving these cases.

INQ339 REC339-4459 E - Agency Organisation 32 - Doctrine, standards, and reform Recommendation 57

The Committee recommends that the General Insurance Code of Practice (the Code) be reformed to implement Recommendation 63 of the Independent Review of the 2020 General Insurance Code of Practice, that is: where the insurer has not made a decision on a claim within 12 months, and the delay is not

INQ339 REC339-4460 A - Responsibility 38 - Agency/Department Reporting Recommendation 58

The Committee recommends that insurers report case management key performance indicators to the Australian Securities and Investments Commission.

INQ339 REC339-4461 E - Agency Organisation 32 - Doctrine, standards, and reform Recommendation 59

The Committee recommends that insurers recognise standard third-party authorisation forms and that this obligation be reflected in staff training.

INQ339 REC339-4462 D - Recovery 6 - Insurance and legal liability Recommendation 60

The Committee recommends that, if a policy renewal falls due when there is long delay in claim handling or the completion of the project, the insurer should:
- be required to offer a reduced form of cover, with an appropriately lower premium

INQ339 REC339-4463 D - Recovery 6 - Insurance and legal liability Recommendation 61

The Committee recommends that insurers be required to ensure that people paying premiums monthly do not pay more.

INQ339 REC339-4464 F - Research and technology 13 - Mapping and data quality Recommendation 62

The Committee recommends that the Australian Government work with state and territory governments to ensure flood maps are produced to a high standard across the nation, regardless of the size of the local government area producing the modelling. This may require:

INQ339 REC339-4465 F - Research and technology 13 - Mapping and data quality Recommendation 63

The Committee recommends that the Australian Government ultimately move towards a national, centralised, public-facing portal containing flood risk data at the household level for:
- all households and small businesses across Australia, and

INQ339 REC339-4457 F - Research and technology 17 - Assets and technology Recommendation 55

The Committee recommends that the Australian Securities and Investments Commission’s MoneySmart life insurance claims comparison tool be extended to general insurance.

INQ339 REC339-4456 A - Responsibility 38 - Agency/Department Reporting Recommendation 54

The Committee recommends the Australian Securities and Investments Commission publish quarterly insurer and brand level data on their performance on the metrics recommended in Recommendation 51.

INQ339 REC339-4455 F - Research and technology 13 - Mapping and data quality Recommendation 53

The Committee recommends the Australian Securities and Investments Commission consider seeking data from insurers on their performance based on the metrics recommended in Recommendation 51:
- Quarterly, for business-as-usual operations
- Monthly, for each declared event.

INQ339 REC339-4447 E - Agency Organisation 32 - Doctrine, standards, and reform Recommendation 45

The Committee recommends that all insurers create a role for a ‘consumer advocate’ which has oversight of and, where appropriate, involvement in, the disputes managed within the firm, cases that have moved to the Australian Financial Complaints Authority (AFCA), and claims which have taken a long

INQ339 REC339-4448 E - Agency Organisation 32 - Doctrine, standards, and reform Recommendation 46

The Committee recommends that the Insurance Council of Australia seek to have the General Insurance Code of Practice approved by the Australian Securities and Investments Commission after implementing any recommendations of the Independent Review of the 2020 General Insurance Code of Practice.

INQ339 REC339-4449 E - Agency Organisation 32 - Doctrine, standards, and reform Recommendation 47

The Committee recommends that the General Insurance Code of Practice be incorporated as a contractually enforceable clause in insurance Product Disclosure Statements (as is the Banking Code of Practice).

INQ339 REC339-4450 F - Research and technology 13 - Mapping and data quality Recommendation 48

The Committee recommends that the General Insurance Code Governance Committee publish aggregate data on code breaches by clause, individual insurer, and brand.

INQ339 REC339-4451 C - Response 2 - Emergency powers Recommendation 49

The Committee recommends that the Australian Securities and Investments Commission (ASIC) appropriately use powers that it has as a result of the removal of the exemption of claims handling of insurance products under the Corporations Act 2001.

INQ339 REC339-4452 F - Research and technology 13 - Mapping and data quality Recommendation 50

The Committee recommends that the Australian Securities and Investments Commission and the General Insurance Code Governance Committee share data so that it is possible to evaluate breaches of the General Insurance Code of Practice in the context of an insurers’ overall claims profile.

INQ339 REC339-4453 A - Responsibility 38 - Agency/Department Reporting Recommendation 51

The Committee recommends that the Australian Securities and Investments Commission develop and define key outcomes measures for the consumer experience, including:
- Communication (outcome measures)

INQ339 REC339-4454 A - Responsibility 21 - Role of Commonwealth Government Recommendation 52

The Committee recommends that legislation provide the Australian Securities and Investments Commission with sufficient data-gathering powers to obtain the information required to monitor and report on the metrics recommended in Recommendation 51.

INQ339 REC339-4466 F - Research and technology 26 - Research Recommendation 64

The Committee recommends that the Australian Government commission research into effective ways of communicating flood risk to communities.

INQ339 REC339-4467 F - Research and technology 13 - Mapping and data quality Recommendation 65

The Committee recommends that the Australian Government continue to work with the insurance industry through the Hazards Insurance Partnership to collate:
- data contained in the National Flood Information Database, and

INQ339 REC339-4468 E - Agency Organisation 37 - Funding Recommendation 66

The Committee recommends that the Australian Government continue to work with the states and territories through National Cabinet to ensure that disaster and resilience funding, and non-financial support, are accessible and adequate for all councils, particularly smaller councils.

INQ339 REC339-4480 A - Responsibility 28 - Personal responsibility Recommendation 78

The Committee recommends the Australian Government work with the Insurance Council of Australia to develop and publish advice on the mitigation measures households could undertake to improve the flood resilience of their property.

INQ339 REC339-4481 F - Research and technology 13 - Mapping and data quality Recommendation 79

The Committee recommends the Australian Government and Insurance Council of Australia explore measures to facilitate the exchange of substantiated information about the resilience of a property to insurers, including new mitigation measures undertaken through state-based grant and loan programs.<

INQ339 REC339-4482 A - Responsibility 9 - Community education Recommendation 80

The Committee recommends insurers facilitate options for policyholders to provide additional information to insurers about the resilience of their property to flood risks, and make further investments to better integrate reported resilience measures into the calculations of premiums.

INQ339 REC339-4483 B - Preparedness 1 - Land-use and building regs Recommendation 81

The Committee recommends that state and territory governments develop buyback and resilience programs for households with very high flood risk and where alternative mitigation measures are unlikely to manage the risk.

INQ339 REC339-4484 B - Preparedness 1 - Land-use and building regs Recommendation 82

The Committee recommends the Australian Government work with state and territory governments to review the operation of existing buy-back schemes to ensure they are targeted appropriately and to evaluate the outcomes for households that have received assistance.

INQ339 REC339-4485 B - Preparedness 1 - Land-use and building regs Recommendation 83

The Committee recommends the Australian Government collaborate with state governments to implement measures to repurpose areas with high flood risk for alternative purposes, including returning developed land into a predeveloped state or repurposing land for recreational or agricultural use.

INQ339 REC339-4486 D - Recovery 6 - Insurance and legal liability Recommendation 84

The Committee recommends that insurers explore offering innovative insurance products that have the potential to improve the operation of the insurance market, including:
- More flexible insurance products for small business, including:

INQ339 REC339-4487 D - Recovery 6 - Insurance and legal liability Recommendation 85

The Committee recommends that the New South Wales and Tasmanian governments collaborate with industry and local governments to reform emergency services levies, aiming to enhance premium affordability and reduce barriers to insurance uptake.

INQ339 REC339-4479 B - Preparedness 39 - Disaster Risk Management Recommendation 77

The Committee recommends the Australian Government consider measures to reduce household level risks, including whether it would be appropriate to extend the Bushfire Resilience Rating Home Self-Assessment App to flood risks.

INQ339 REC339-4478 E - Agency Organisation 32 - Doctrine, standards, and reform Recommendation 76

The Committee recommends the General Insurance Code of Practice be amended to require that insurers be required to consider relevant propertylevel mitigation measures in any new or renewing insurance policy, and to demonstrate how those measures have been reasonably reflected in the proposed prem

INQ339 REC339-4477 E - Agency Organisation 37 - Funding Recommendation 75

The Committee recommends that a climate financing framework be developed in relation to government mitigation and adaptation funding.

INQ339 REC339-4469 E - Agency Organisation 37 - Funding Recommendation 67

The Committee recommends a more flexible approach to post-flood grant arrangements, to expand eligibility to include some insured people, including:

INQ339 REC339-4470 A - Responsibility 24 - Govt responsibility Recommendation 68

The Committee recommends that all levels of government should work together to ensure that, as far as is possible, people don’t need to resubmit the same information multiple times for different disaster support.

INQ339 REC339-4471 E - Agency Organisation 37 - Funding Recommendation 69

The Committee acknowledges the increased funding for the community legal sector recently announced. While the focus of this funding will be for family violence services, the Committee recommends that an appropriate proportion be dedicated to natural disaster services.

INQ339 REC339-4472 E - Agency Organisation 37 - Funding Recommendation 70

The Committee recommends the Australian Government consider measures to improve the affordability of flood insurance for existing policyholders with high flood risk properties, including the appropriateness of a government supported reinsurance arrangement.

INQ339 REC339-4473 B - Preparedness 1 - Land-use and building regs Recommendation 71

The Committee recommends that the Australian Government work with State, Territory and local government through National Cabinet to ensure that further development does not occur in areas of 1-in-100 flood risk or greater.

INQ339 REC339-4474 B - Preparedness 1 - Land-use and building regs Recommendation 72

The Committee recommends that the Australian Government work with state, territory and local governments through National Cabinet to ensure that publicly disclosed risk information at the individual property level is available through the property conveyancing process or mandated in state rental

INQ339 REC339-4475 B - Preparedness 1 - Land-use and building regs Recommendation 73

The Committee recommends that building codes and planning rules be strengthened and future-proofed to improve the resilience of communities and households, consistent with Recommendation 2 of the Actuaries Institute’s Funding for Flood Costs report.

INQ339 REC339-4476 E - Agency Organisation 37 - Funding Recommendation 74

The Committee recommends the Australian Government continue to fund community level mitigation, ensuring at least $200 million per year ongoing.

INQ339 REC339-4488 A - Responsibility 24 - Govt responsibility Recommendation 86

The Committee recommends that state and territory governments remove state-based taxes on general insurance products and shift the tax burden toward less distortionary taxes.

INQ339 REC339-4403 E - Agency Organisation 32 - Doctrine, standards, and reform Recommendation 1

The Committee recommends the Australian Government define the following terms in the Insurance Contracts Act 1984:
- All major forms of water damage, including “rainfall runoff”, “storm surge”, “tidal surge” and “riverine flood”.

INQ339 REC339-4415 E - Agency Organisation 32 - Doctrine, standards, and reform Recommendation 13

The Committee recommends that the General Insurance Code of Practice be amended to require insurers when offering final cash settlements to include areasonable uplift/contingency sum to reasonably compensate policyholders for the risks they take on in project managing the repairs to their proper

INQ339 REC339-4416 E - Agency Organisation 32 - Doctrine, standards, and reform Recommendation 14

The Committee recommends the General Insurance Code of Practice be amended to allow policyholders to have a 12-month period to seek a review of a final cash settlement where there is a change in the facts upon which the original determination was made.

INQ339 REC339-4417 E - Agency Organisation 32 - Doctrine, standards, and reform Recommendation 15

The Committee recommends that the General Insurance Code of Practice prohibit the use of the terms “without prejudice” or “confidential” (or other misleading terms) on final cash settlement offers.

INQ339 REC339-4418 D - Recovery 33 - Relief and recovery Recommendation 16

The Committee recommends that a new service be offered to support vulnerable cash settlement recipients to project manage rebuilds and major repairs. This could be similar to the Service Navigator role in Queensland’s Resilient Homes Fund.

INQ339 REC339-4419 A - Responsibility 35 - Business and Industry in relation to industry Recommendation 17

The Committee recommends that the Insurance Council of Australia in consultation with the Australian Securities and Investments Commission:

INQ339 REC339-4420 A - Responsibility 35 - Business and Industry in relation to industry Recommendation 18

The Committee recommends that there should be insurer and regulator oversight of Scopes of Work through the following mechanisms: