Australia’s general insurance industry has entered a new phase in updating the General Insurance Code of Practice, aiming to create a version that is legally enforceable and more accessible to policyholders.
Spearheaded by the Insurance Council of Australia (ICA), the revised code will integrate outcomes from a recent independent review and recommendations from the 2022 Parliamentary Flood Inquiry.
The current code, first introduced in 1993, has been found to be difficult for consumers to interpret and insufficiently aligned with modern insurance challenges, including regulatory changes and disaster response protocols.
Insurers and the ICA have agreed that the revised document must clarify the obligations of insurers and make them easier for customers to understand.
The ICA confirmed the new version will be developed with extensive input from consumer stakeholders, regulators, and government bodies.
ICA chief executive Andrew Hall said that while flood recovery in New South Wales remains a pressing concern, long-term reforms are also essential.
“Developing a new code is a once-in-a-generation opportunity to deliver better outcomes for consumers. As an industry, we are committed to maintaining and uplifting consumer protections, making it easier for them to understand their rights and engage with their insurer,” he said.
The public consultation phase is scheduled for early 2026, with the code expected to be submitted to the Australian Securities and Investments Commission (ASIC) later that year. The current version will stay in effect during the transition.
The ICA will draw from the recent code review and ongoing dialogue with its Consumer Advisory Council and other stakeholders to shape the new draft. This process includes input from experts in consumer advocacy and disaster response.
Several complementary actions are already underway. These include:
The ICA also announced that insurers have agreed in principle to introduce internal consumer advocacy roles. Each company will determine how best to structure these functions based on their operational models.
“Where appropriate, the revised code will include some prescriptive provisions, including those which demonstrate recent inquiry recommendations have been accepted,” Hall said. “The new code will do what good industry codes seek to do: commit to standards and specific practices which go over and above legislative and regulatory requirements and as a result improve customer outcomes.”
Consumer groups welcomed the move toward enforceability but stressed that stronger commitments must not come at the cost of existing protections.
Organisations such as the Financial Rights Legal Centre, Consumer Action Law Centre, and Financial Counselling Australia cautioned that any reduction in current standards would be unacceptable.
Financial Rights Legal Centre senior policy and advocacy officer Drew MacRae said making the code part of customer contracts is significant. However, MacRae said it was important to ensure there is no backsliding on commitments already made.
“Ensuring that the general insurance sector meets the promises made to consumers in their code of practice by including the code in their contracts has been a long-held goal of ours. We are therefore pleased to see insurers taking this important step,” he said. “There is, however, a long way to go.”
He added that ongoing delays could erode consumer trust, especially with the 2027 implementation timeline. He urged insurers to act now to improve claims processes and communication.
Louise Hayes, national coordinator for disaster recovery at Financial Counselling Australia, echoed these concerns, noting the impact of insurer practices on vulnerable Australians during crises.
“Financial counsellors work with people who have been badly treated by insurers during some of the most traumatic times of their lives, resulting in significant financial and mental stress,” she said. “We need this new approach to drive an improvement, and not a reduction, in consumer protections – especially around how insurers deal with vulnerable customers.”
Rose Bruce-Smith, a senior policy officer with the Consumer Action Law Centre, highlighted the urgency of the reforms.
“We’re pleased that the industry has committed to incorporating the code in customer contracts. However, it’s essential that this step forward doesn’t come at the expense of any consumer protections. Timeliness is also of the essence – as the current floods in NSW have unfortunately made all too clear, we can’t delay uplifts to consumer protections while natural disasters cause major insurance claims with increasing frequency,” she said.
The ICA is expected to file an application with the ACCC by the second half of 2025 to advance standardised home insurance policy terms. Broader engagement will continue throughout 2025 and into 2026.
The final version of the code, expected to take effect by 2027, aims to set a new standard for transparency and accountability in general insurance practices. Until then, the existing code and supplementary reforms will guide insurer conduct.
