ASIC has issued a letter reminding general insurers of their obligations as Australian financial services (AFS) licensees when handling insurance claims, especially in response to severe weather events. (ASIC’s letter was published on 6th March 2024).
The letter sets out the obligations general insurers have as AFS licensees under the Corporations Act 2001 (Cth). General insurers are required to act efficiently, honestly, & fairly when providing claims handling services: see section 912A.
This includes resolving claims in a timely manner, especially when responding to claims relating to severe weather events.
Insurers are required to:
– communicate transparently, clearly & in a timely way with consumers regarding their claims
– effectively project manage third parties, including assessors & tradespeople
– identify complaints and expressions of dissatisfaction at the earliest opportunity
– recognise consumers experiencing vulnerability & tailor their claims handling service accordingly, &
sufficiently resource claims handling & dispute resolution functions,
& ensure staff are adequately trained.
Insurance claims handling is an enforcement priority for ASIC in 2024. ASIC is
monitoring claims handling through reports of misconduct made directly to
ASIC, any systemic issues reported by AFCA, and regular contact with consumer groups assisting people with claims & related disputes.
ASIC’s message is they are watching how insurers support their customers very closely. Evidence of significant misconduct identified through these channels may result in enforcement action.
𝘾𝙤𝙢𝙥𝙡𝙞𝙖𝙣𝙘𝙚 𝙧𝙚𝙫𝙞𝙚𝙬 𝙤𝙛 𝙘𝙡𝙖𝙞𝙢𝙨 𝙝𝙖𝙣𝙙𝙡𝙞𝙣𝙜 𝙥𝙧𝙖𝙘𝙩𝙞𝙘𝙚𝙨
It may be prudent to conduct a compliance review of your claims handling & settling practices including service suppliers. The review should also cover GI Code of Practice obligations.
A compliance review assesses the adequacy of your compliance arrangements to manage AFSL & Code obligations & provides solutions adopting a risk-based approach.
Underwriting Agencies with AFSL claims authorisation & Insurance Claims Managers (TPA) should also consider a compliance review.
Contact me to explore how I can assist.