First Fair Insurance Code data released

The Insurance Council of New Zealand released today its first Fair Insurance Code annual report of the number of claims received, the number of complaints made to internal and external dispute resolution schemes, along with the number of significant breaches.

Insurance Council Chief Executive Tim Grafton said “Fourteen upheld complaints out of over 1.12 million claims certainly puts in perspective that insurers are meeting high standards of service and resolving almost all claims.”

Grafton said “The Fair Insurance Code set a high benchmark for self-regulation, so this data makes evident that the public can have trust and confidence in their dealings with our members and their commitment to resolving claims. By reporting the facts, we can hopefully change misconceptions in the community so people can have confidence that insurance is there for you when you need it.

For the period 1 January 2016 to 31 December 2016 insurers received 1.12 million claims. Of that only 3,858 complaints (or one third of a percent) were made to insurers’ internal dispute resolution services. “It is pleasing that insurers’ internal dispute resolution processes were able to resolve 95% of all of the complaints made”.

Of the very small number of complaints that were then lodged with the external dispute resolution schemes (204) only 14 complaints were upheld by the external dispute resolution services. The balance were either settled, partially upheld or withdrawn.

There were no significant or unresolved significant breaches. A significant breach of the Code is a material breach of any provision in the Code – or a series of breaches of the Code that, taken together, are material – with the potential to bring the insurance industry into disrepute.

The new Fair Insurance Code came into effect on 1 January 2016. For the first time, insurers need to meet minimum timeframes for responding to their customers when claims are made and keep them informed about the progress of their claim.

Key changes to the new Code include:

  • Enhanced, effective communication with the insured, particularly concerning up-front disclosure of key information;
  • To act reasonably when faced with the non-disclosure of relevant information by the insured;
  • Best-practice timeframes for communicating with the insured at claim time;
  • Requirement to prioritise vulnerable customers in a catastrophe or disaster;
  • Requirement to train staff and agents about the Code so they can fulfil their responsibilities as well.

All members of the Insurance Council are signatories to and must comply with the Fair Insurance Code. The Fair Insurance Code sets out industry best-practice standards for ICNZ members. It describes what level of service people can expect, from their first contact with their insurer through to claim time. The Code also describes the responsibilities that both parties have to each other and provides information on complaints procedures. If customers have a complaint they should raise this directly with their insurer in the first instance because all insurers have internal dispute resolution processes. If the complaint is not resolved satisfactorily the customer can then lodge a complaint with one of the external dispute resolution schemes. For fire and general insurers this will either be the Insurance & Financial Services Ombudsman Scheme or Financial Services Complaints Ltd.

Members of ICNZ and the Dispute Resolution Services have responsibilities to report significant breaches and unresolved significant breaches of the Code to the ICNZ Code Compliance Committee.

The Code Compliance Committee comprises a majority of independent experts, to investigate significant breaches of the Code. The Committee members are Rt Hon Sir Anand Satyanand, Hon David Caygill, Dr David McGee CNZM QC with ICNZ Chief Executive Tim Grafton as Chair.

Key facts for the period 1 January 2016 to 31 December 2016

No. of Claims No. of complaints to internal DR process No. of complaints to external DRS No. of complaints upheld by external DRS No. of significant breaches No. of unresolved significant breaches
1,122,201 3,858 (0.34% of claims) 204 (5.3% of complaints to internal DR process) 14 (6.9% of complaints to DRS) 0 0

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