The Australian Finance Industry Association (AFIA) has released an updated version of its Insurance Premium Funding (IPF) Code of Practice, which will take effect on July 1.
The changes aim to strengthen transparency and consumer protections while maintaining industry standards.
AFIA CEO Diane Tate said the revised code ensures that customers engaging with IPF providers receive clearer information and fair treatment.
“Being a signatory to our IPF Code signifies a commitment to high standards and professionalism,” she said. “Customers engaging with IPF companies who adopt this code can do so with confidence, knowing they will receive fair treatment, transparent pricing, and clear communication.”
Insurance premium funding allows businesses and individuals to spread the cost of insurance over time, reducing the immediate financial strain of lump-sum payments. Tate noted that this option remains important, particularly as insurance affordability continues to challenge consumers.
“In the face of rising living costs, economic uncertainty, and challenges with insurance affordability, IPF provides a critical solution, helping individuals and businesses effectively manage their insurance needs and costs,” Tate said.
Industry figures estimate that IPF providers supply around $7 billion in funding each year, assisting individuals and businesses – particularly small and medium-sized enterprises (SMEs) – in managing their cash flow while keeping essential insurance policies in place.
The updated code introduced several changes, including:
The release of the updated code comes as broader affordability concerns continue to shape discussions within the insurance sector.
The Australian Consumers Insurance Lobby (ACIL) recently proposed a $250 million annual fund, financed by insurers, to reduce premium costs, particularly in high-risk areas.
The proposal highlights ongoing debates over whether the burden of affordability should be addressed through public or industry-led initiatives.
While AFIA’s code update focuses on consumer protections within premium funding, ACIL’s affordability proposal has placed renewed attention on the financial role of insurers in addressing rising premium costs.
ACIL has proposed that insurers contribute $250 million annually toward measures such as premium relief for vulnerable consumers, disaster mitigation projects, and research into long-term affordability strategies.
This initiative follows the Insurance Council of Australia’s (ICA) recent push for a $30 billion government-funded Flood Defence Fund, aimed at reducing disaster risk through public investment.
