Australia’s insurance industry is undergoing the biggest regulatory and compliance changes in its history.
The Insurance Council of Australia (ICA) has released a new General Insurance Code of Practice, and all insurers are required to implement the changes by July 1, 2021. The changes are legally binding and, from July 1, 2021, organisations can be fined for non-compliance. These fines can amount to hundreds of thousands of dollars.
To avoid penalties and compliance headaches, insurers will need to change their business to comply with the new regulations, which must be met in their entirety, as opposed to a piecemeal approach. The new Code is a result of a two-year review by the ICA, which invited input and recommendations from various organisations.
Australia’s insurance industry leaders must act now to bring their investigation teams, and the wider organisation, in line with the changes. Investigation teams will be pressured by the more detailed compliance requirements, but this does not mean there are no business imperatives.
Polonious’ report, New General Insurance Code of Practice: A reference guide to how changes will impact fraud investigations, gives insurance industry leaders an overview of the required changes, and details of how the impending requirements can go a long way to benefiting the business, including:
- The Insurance Council of Australia (ICA) has released a new General Insurance Code of Practice and by July 1, 2021 all insurers are required to implement the changes, which are legally binding.
- From July 1, 2021, organisations can be fined for non-compliance and these fines can amount to hundreds of thousands of dollars. Larger breaches can result in significant financial impact, including compensation for loss or damage, and payment of a community benefit up to $100,000 per offence.
- Minor breaches will attract minimal financial impact, and, with rectification steps within a certain time, companies can audit their own compliance with the Code at their own cost and advertise corrections.
- When deviating from an agreed investigation behaviour, an individual can raise a complaint against the insurer with the Australian Financial Complaints Authority (AFCA), and complaints will be given much more weight.
- Insurers also risk damage to their brand from negative media reports resulting from a failed or non-compliant investigation, where the claimant is often portrayed as the victim.
- Complaints are on the rise — by a huge 230 per cent. The General Insurance Code Governance Committee found Australia’s insurance sector breached the code of practice 31,186 times during the 2019 financial year. Source: com.
- About one-third of finalised complaints were found in favour of consumers or small businesses. Source: General Insurance in Australia, Annual Report, April 2020.
- At least 50 of Australia’s top insurers are expected to abide by the new Code Of Practice come July 1, 2021.
The new Code of Practice includes very detailed changes and new requirements, down to the number of minutes an interview should take and most systems are not equipped to handle this level of detail.
With Polonious, compliance is not a burden
New regulations should not mean a higher level of reporting burden. Now is the time to take advantage of better technology, methodologies and workflows to ensure your compliance and customer service obligations go hand-in-hand.
Turn today’s investigation challenges into tomorrow’s business process improvements with Polonious.
The report details how the changes directly impact insurance companies; outlines the penalties for non-compliance; and shows how you can not only meet the compliance requirements, but improve the business as a result.
Polonious integrates all the new compliance measures into the core system. With one application, it is possible to meet compliance requirements and reduce investigation time and load.