LESS RED TAPE FOR INSURERS, BETTER PROTECTION FOR CONSUMERS

Media Release.

The Gillard Government has welcomed the passage of legislation today that will reduce complexity and provide certainty for insurers and consumers alike.
The Insurance Contracts Amendment Bill 2013 continues the Government’s efforts to reduce the burden of regulation on business and consumers.
The new reforms will:

• remove impediments to the use of electronic communication for statutory notices and documents;
• give increased powers to the regulator, the Australian Securities and Investments Commission, to take action to address breaches of the duty of utmost good faith by insurers, including in respect of claims handling; and
• make the duty of disclosure easier for consumers to understand and comply with, especially at renewal of household/domestic insurance contracts.

The ability for statutory notices and documents to be provided electronically will not only bring the insurance industry into line with other industries but reduce complexity for consumers.

These measures build on the Gillard Government’s significant, consumer focussed reforms, to insurance, including;

• $100 million to reduce flood risk – bringing about real reductions in insurance premiums
• Standard definition of ‘flood’ – something no other government has been able to achieve
• Key Facts Sheet – one page, in plain English, to save consumers from 20 pages of jargon and uncertainty
• Flood data portal – a new online one-stop-shop for flood risk information to assist the community because more information means real choice for families looking to protect their homes

The Bill gives effect to a number of recommendations made by Mr Alan Cameron AM and Ms Nancy Milne in their review of the operation of the Insurance Contracts Act 1984.
The reforms in this Bill have been subject to extensive consultation throughout 2011 and 2012 with industry, consumer advocates and Treasury.  The Government has, in a minority parliament, been able to deliver these common sense reforms that industry and consumer advocates have been seeking since 2004.

Media Contact: Sam Casey 0421 697 660

Bill Shorten MP.
Minister for Financial Services and Superannuation