The Insurance Council of Australia (ICA) has expressed support for draft federal legislation that would introduce a broad ban on unfair trading practices, with implications for multiple parts of the general insurance market.
The Competition and Consumer Amendment (Unfair Trading Practices) Bill 2026 would insert a general prohibition on unfair trading into the Australian Consumer Law and introduce specific rules on subscription practices and so‑called drip pricing. If passed by Parliament, the changes are scheduled to commence on July 1, 2027. For motor insurers and their supply networks, a key focus is third-party claims intermediaries, including credit hire companies and accident management companies (CHCs/AMCs). These firms arrange replacement vehicles and repairs for not‑at‑fault drivers and then seek to recover costs from the at‑fault party or that party’s insurer.
Insurers and consumer stakeholders have raised concerns about outcomes in the post‑accident market, particularly where customers are approached by unfamiliar entities soon after an incident. According to the ICA, consumers have reported instances where they believed they were dealing with their own insurer or an insurer‑endorsed provider when they had in fact contracted with a separate CHC or accident management firm. Some policyholders have later discovered that legal proceedings were commenced in their name without their knowledge, or that they were being pursued personally for charges when cost recovery from an at‑fault party failed. Other reported issues include disputes about high or inflated vehicle hire or repair costs and situations where vehicles were not released until outstanding amounts were paid.
The draft bill would bring such conduct within the scope of consumer law, creating another mechanism for regulators to address these practices alongside existing financial services obligations. ICA chief executive Andrew Hall said the measures respond to a gap in the current framework. “The last thing someone who’s been in an accident needs is a dodgy operator misrepresenting who they are and pushing services they don’t need. These laws address a genuine gap, and we support them. The next step is making sure operators understand the new obligations and that enforcement follows for those who don’t,” Hall said. He also encouraged policyholders to deal directly with their insurer where they are uncertain about third parties. “We’d urge policyholders to be cautious about unsolicited approaches and to go directly to their insurer if they need help or have concerns about who they’re dealing with,” he said.
Under the proposal, the Australian Competition and Consumer Commission (ACCC) would be responsible for administering the new prohibitions under the Australian Consumer Law. The ICA has indicated it expects the ACCC to play a role in educating affected businesses about their obligations and in taking enforcement action where required. The council says it supports the direction of the reforms but is seeking a framework that aligns with existing financial services law, including the Australian Securities and Investments Commission Act and sector‑specific conduct rules. It has cautioned against significantly increasing the industry’s reported $3.5 billion annual regulatory cost through duplication or inconsistency. The ICA has lodged a submission on the exposure draft and says it will continue working with Treasury on the final design of the regime and related guidance.
The Australian Small Business and Family Enterprise Ombudsman (ASBFEO) has also commented on the exposure draft, supporting the introduction of general and specific prohibitions on unfair trading while calling for additional protections for small businesses. In its response, ASBFEO noted that small businesses accounted for about one‑third of Australia’s GDP and about 39% of private sector employment in 2023-24, but their share has declined compared to 2006 levels. The ombudsman argues that smaller enterprises can face vulnerabilities similar to individual consumers, particularly where there is a power imbalance with larger counterparties.
ASBFEO has urged Treasury to extend unfair trading protections beyond consumer transactions to business‑to‑business dealings involving small enterprises, including in financial services and credit. It has also recommended that equivalent protections be reflected in the Australian Securities and Investments Commission Act so that unfair trading bans apply to financial products and services as well as general consumer transactions.
The draft bill proposes three main changes to the Australian Consumer Law that are relevant to insurance stakeholders and associated service providers:
Public consultation on the exposure draft and explanatory materials ran from Feb. 9 to Feb. 23, 2026. The reforms form part of the federal government’s broader commitment to ban unfair trading practices. For insurers, the next stage will involve tracking the final legislative text, understanding how responsibilities will be allocated between the ACCC and the Australian Securities and Investments Commission (ASIC), and assessing how the new prohibition interacts with existing conduct obligations under financial services legislation. Industry participants are also expected to review arrangements with CHCs, repairers, and other intermediaries that communicate directly with customers after an accident.
