The Government has announced its response to the Senate Economics References Committee’s recommendations on Australia’s general insurance industry.
The Government agrees there is merit in further reviewing the following recommendations:
- strengthen the transparency of general insurance pricing by amending the product disclosure regime in the Corporations Act 2001 to require insurers to:
- disclose the previous year’s premium on insurance renewal notices; and
- explain premium increases when a request is received from a policyholder;
- initiate a review of component pricing to establish a framework for amending the Corporations Act 2001 to provide component pricing of premiums to policyholders upon them taking out or renewing an insurance policy, as well as an assessment of the benefits and risks to making such a change;
- initiate an independent review of the current standard cover regime with particular regard to the efficacy of current disclosure requirements;
- that the government work closely with industry and consumer groups to develop and implement standardised definitions of key terms for general insurance;
- that the government undertake a review of the utility of Key Facts Sheets as a means of product disclosure, with particular regard to the:
- effectiveness of Key Facts Sheets in improving consumer understanding of home building and contents policies; and
- merit of extending the use of Key Facts Sheets to other forms of general insurance.