New Fair Insurance Code comes into force today

New Fair Insurance Code comes into force today

1st January

The new Fair Insurance Code which comes into force today provides consumers and SMEs with higher standards of service, the Insurance Council of New Zealand said today.

ICNZ’s members have worked on implementation over the last year in the lead up to the new Code and have made many changes to their processes, documentation and systems to ensure they align with the requirements of the revised Code to help consumers.

“These new standards come in a new Fair Insurance Code that members of the Insurance Council must comply with. They set a high benchmark for self-regulation, so the public can have trust and confidence in their dealings with our members,” says Insurance Council of New Zealand (ICNZ) Chief Executive Tim Grafton.

“For the first time, insurers will need to meet minimum timeframes for responding to the public when claims are made and keep them informed about the progress of their claim,” he said.

“Check our website – if your insurer is not an ICNZ member, then these consumer protections don’t apply” he said.

The revised Code, which came into effect today, commits ICNZ members to higher standards of service in all their dealings, not just with respect to claims.

“The new Code addresses issues that arose from the Canterbury earthquake experience as the previous Code didn’t take into account catastrophe situations and didn’t set out any timeframes for responding to claimants or keeping them informed of the progress of their claims,” said Mr Grafton.

“There will be independent scrutiny of breaches of the Code, with a focus on putting things right for the insured and sanctions for significant breaches. The number of breaches will be reported publicly to add a further level of accountability,” he said.

Key changes to the new Code include:
• Enhanced, effective communication with the insured, particularly concerning up-front disclosure of key information;
• To act reasonably when faced with the non-disclosure of relevant information by the insured;
• Best-practice timeframes for communicating with the insured at claim time;
• Requirement to prioritise vulnerable customers in a catastrophe or disaster;
• Requirement to train staff and agents about the Code so they can fulfil their responsibilities as well.

The new Code also sees the establishment of a Code Compliance Committee, comprising a majority of independent experts, charged with investigating significant breaches of the Code. The Committee is chaired by ICNZ Chief Executive Tim Grafton and members include Rt Hon Sir Anand Satyanand, Hon David Caygill and Dr David McGee CNZM QC.

Sanctions for such breaches will range from a fine to expulsion from the ICNZ. “A maximum fine of up to $100,000 for unresolved significant breaches gives the new Code the necessary teeth to function as an effective self-regulatory regime” he said.

ENDS

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