The Australian Consumers Insurance Lobby Inc (ACIL) has raised questions with the Insurance Council of Australia (ICA) regarding the recent initial independent review report of the General Insurance Code of Practice and the use of insurance reports. experts.

ACIL, which represents insurance consumers, argues that the review does not sufficiently address critical concerns related to the role and accountability of expert reports in insurance claims.

Problems with expert reporting standards

Although the industry standard of good practice on the use of expert reports provides guidelines on how insurers should use expert reports, ACIL highlighted that there is no no specific requirements for the experts themselves regarding the accuracy or quality of their reports.

ACIL says insurers have been slow to adopt the new standards and that when concerns are raised about expert reports, insurers often fail to address them.

The consumer advocacy group has identified several key areas where improvements are needed:

• Evidence-based conclusions: Experts should be required to provide sufficient evidence to support their conclusions.
• Accurate enforcement of regulations: Reports must properly reference relevant building codes and industry regulations.
• Consideration of certified solutions: When assessing defects, experts should determine whether certified performance solutions were used.
• In-depth investigations: Experts should conduct in-depth investigations, particularly in complex cases, and make additional assessments if necessary.
• Transparency on inconclusive findings: Experts should clearly indicate when their findings are inconclusive, rather than making interpretations that could favor insurers.

The group also expressed concerns that insurers could influence expert opinions and supplier contracts, which could prompt denials or reductions of claims. Additionally, consumers often bear the financial burden of challenging expert reports, which the group says creates an imbalance.

ACIL advocates for insurers to provide consumers with independent options to challenge expert findings.

Shandiman said unclear regulations regarding expert reports put consumers at a disadvantage.

“The lack of sufficient regulation around standards of expertise creates a power imbalance that harms consumers, who often bear the financial burden of challenging expert opinions,” he said.

He also pointed to the Australian Securities and Investments Commission (ASIC), which has indicated it will increase oversight of claims management.

Shandiman stressed that insurers could face greater regulatory pressure if these issues are not proactively addressed.

ACIL has affirmed its commitment to working with the ICA to address these concerns and ensure that the Code of Practice provides stronger protection for consumers.

The group’s report included recommendations for updating the code based on 23 submissions from a variety of stakeholders, including consumer groups, insurers and regulators.

Rowell stressed the importance of the code in guiding insurers and protecting consumers, especially small businesses and individuals. She stressed that the review offers the opportunity to significantly improve consumer protection.

A second consultation document is expected to be published by the end of 2024.