There is pressure on both sides of the Tasman, from Consumer NZ and the Australian Federal Government, to review the exemption for insurance from laws covering unfair contract terms, a report says.
According to the Insurance Brokers Association of New Zealand (
IBANZ), Canberra has ruled out intervening directly in the insurance market and is, instead, focusing on accountability and improving consumer understanding.
Suncorp Insurance CEO Gary Dransfield reportedly warned that any changes to unfair contract terms “need to be developed carefully and in close consultation with the industry.” Without consultation there is a risk that customer experiences would be jeopardised and unnecessary complexity added to insurance processes, he said.
The Australian Government, IBANZ said, has asked the Treasury to assess whether legislation should be amended to require insurers to show previous-year premiums on renewal notices and explain rises when requested by a policyholder.
“The senate inquiry and the government were persuaded that insurance should be covered by unfair contract term provisions. Proposals on this matter will be released early this year, despite arguments the sector is covered by “utmost good faith” obligations and has more than enough oversight,” IBANZ said.
“While the industry has campaigned against being included in the unfair contract terms provisions, the move is no surprise after it was flagged in a review by government advisory group Consumer Affairs Australia and New Zealand.
“ICA says it has been discussing the issue with various parties. It says any changes need examination and consultation so they are not detrimental to customer experiences, competition, and product differentiation or pricing.”
The moves are similar to Consumer NZ
proposals for changes to the insurance industry.
Related stories:
Consumer body calls for industry clean-up
IBANZ and Willis Towers Watson reveal top cyber insurance trends for 2018
