The Australian Financial Complaints Authority (AFCA) has opened a consultation period to collect stakeholder feedback on two approach documents that address common issues in general insurance complaints.
Running Nov. 6-27, the consultation encourages stakeholders to share insights on AFCA’s updated and new approaches related to consumer insurance.
The first document, “The AFCA Approach to Non-Disclosure and Misrepresentation,” has been revised to incorporate legislative changes introduced in 2021.
The second document, “The AFCA Approach to the Duty to Take Reasonable Care Not to Make a Misrepresentation,” is new. It provides AFCA’s framework for evaluating complaints where customers may not have fully disclosed information or may have unintentionally misrepresented facts.
According to AFCA, these documents aim to provide clarity on how it applies legal principles, regulatory guidance, and industry standards, helping to ensure consistent handling of complaints.
AFCA encourages interested parties to review the documents and submit feedback via its website before the consultation period ends.
AFCA’s Annual Review for 2023-24 highlighted an 18% rise in financial hardship complaints, including cases related to mortgages, personal loans, and credit card debt.
Many consumers reported dissatisfaction with responses from financial institutions, citing limited communication and insufficient support during financial challenges.
In the general insurance sector, complaints continued to increase, driven in part by rising premiums for car and home insurance. AFCA noted that while consumers face escalating costs, some insurers have not significantly improved complaint resolution processes or invested in necessary resources.
AFCA CEO and chief ombudsman David Locke suggested that insurers adopt a more “resolution-focused” approach, particularly for complex cases where customers face financial stress.
AFCA’s data also reflects a significant rise in complaints from Aboriginal and Torres Strait Islander (ATSI) customers, particularly in comprehensive motor vehicle insurance claims.
These complaints, which increased by 47%, were frequently tied to delays in claim processing and issues related to financial hardship.
Overall, complaints from ATSI customers grew by 25%, totalling 3,161 cases in 2023-24.
This consultation on general insurance reflects AFCA’s focus on addressing emerging consumer concerns and enhancing the consistency of outcomes across Australia’s financial and insurance sectors.
“These documents detail how AFCA applies legal principles, industry codes, regulatory guidance, and good industry practices in the investigation and handling of complaints,” AFCA said.
