Australia’s insurance industry is undergoing the biggest regulatory and compliance changes in its history. Polonious has prepared a report detailing how the changes directly impact insurance companies. It outlines the penalties for non-compliance; and shows how you can not only meet the compliance requirements, but improve the business as a result.
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The Insurance Council of Australia (ICA) has released a new General Insurance Code of Practice and by January 1, 2021 all insurers are required to implement the changes, which are legally binding.
From July 1, 2021, organisations can be fined for non-compliance and these fines can amount to hundreds of thousands of dollars. Larger breaches can result in significant financial impact, including compensation for loss or damage, and payment of a community benefit up to $100,000 per offence.
Minor breaches will attract minimal financial impact, and, with rectification steps within a certain time, companies can audit their own compliance with the Code at their own cost and advertise corrections.
When deviating from an agreed investigation behaviour, an individual can raise a complaint against the insurer with the Australian Financial Complaints Authority (AFCA), and complaints will be given much more weight.
Insurers also risk damage to their brand from negative media reports resulting from a failed or non-compliant investigation, where the claimant is often portrayed as the victim.
Complaints are on the rise — by a huge 230 per cent. The General Insurance Code Governance Committee found Australia’s insurance sector breached the code of practice 31,186 times during the 2019 financial year. Source: AFR.com.
About one-third of finalised complaints were found in favour of consumers or small businesses. Source: General Insurance in Australia, Annual Report, April 2020.
At least 50 of Australia’s top insurers are expected to abide by the new Code Of Practice come July 1, 2021.
The new Code of Practice includes very detailed changes and new requirements, down to the number of minutes an interview should take. Most systems are not equipped to handle this level of detail.
“… To meet that simple requirement, we need to count out four months, and then on top of that 30 days. At four months a process of review needs to start and within 30 days reviews must be finished and delivered. To ensure compliance, teams should build in reminders prior to that.”
“Polonious has analysed numerous client investigation processes to determine the efficiencies gained after implementing the SAME methodology.
On average, the ROI at 90 days after implementation was an approximate time saving of 33 per cent, with improvements at 15 out of the 18 stages of the investigation process.”
You benefit from using Polonious in so many ways…
More than any other factor, the ability to configure a case management solution to reflect your business process gives you a competitive and organizational advantage.
Faster turnaround times. By allowing users to focus on their core responsibilities and not administration and reporting, they are freed up to work the case and complete it in a timely manner.
Ease of navigation, offering easy to use person, organisation and entity searching, case filtering and deep data and document search functionality users can easily find critical information or cases and take action.
Instant overview of case statuses. Via the dashboard, users immediately get a view of their cases with statuses and key dates identified.
Instant updates. Managers in the office can access the newly added data at the press of a button and share it with internal or external clients.
Reduced administrative effort. Typically Polonious reduces case administration from 10 to 25%.
Guided behaviour via configuration of available actions makes it easy for users to understand what they should do next. Users can easily add updates and enter text, change statuses, upload documents or media, check off completed actions, record relevant metrics like case time, travel time, expenses or mileage traveled, proof entries made by others, record complaints or use the log entry as a basis to create a report.
Available anywhere, anytime, online or offline. Users in the field can update case information directly with any device that can run a browser or the ios or android application then sync back to Polonious when they next have access to the Internet.
Automated case reports. In many cases the reports can be completely automated using data, documents and images added during the investigation process.
Less is more. Users only see the parts of the system relevant to their involvement and only cases that they need to see. Once logged in, the user’s view of the world is dependent on many factors including their role in relation to a case such as as a specialist, supplier/vendor, staff member, manager or auditor, the current status of the case and the business units or organisations they are attached to.
Automated updates keep interested parties aware of the progress of their cases via status updates, emails or text (SMS) messages.
How will the changes to the GICoP affect your business?
The Australian insurance industry is currently undergoing one of the most significant regulatory and compliance changes in history, and insurance providers must become well versed in these new rules. At Polonious Systems, we believe that education is crucial to helping businesses thrive in times of change. That’s why we’ve developed a guide for insurance providers, helping them navigate the key changes to regulation and compliance in the General Insurance Code of Practice (GICoP). If you have questions about how this affects your business, don’t hesitate to reach out to the Polonious Systems team.
What are some of the key major changes to the GICoP?
The changes to the GICoP become legally binding and need to be integrated by July 1, 2021. To ensure you maintain compliance, make sure you are across the following regulatory changes within the 2020 Code of Practice.
- Accessible language. The 2020 Code of Practice has been rewritten to have more accessible language for practitioners, investigators, and customers alike. This encourages consumers to develop deeper understandings of their rights.
- Mandatory investigation standards. There have been revisions made to improve the standard of investigations, including
- Shorter settlement times for claimants (companies will have to keep their review process under 30 days)
- Higher expectations for record-keeping to meet compliance obligations
- Stricter requirements concerning actions being taken by the investigators (e.g. 90-minute time limits on investigation interviews where there was previously no time limit)
- More transparency from insurance providers. There will be a push for more openness for claimants to prevent customer dissatisfaction and claim retractions. This will include enforced timeframes for investigation updates for customers, requirements for customer information requests, and transparent processes for investigation conduct.
- Provisions for vulnerable customers. A new section will be introduced for customers experiencing vulnerability such as family violence, age, language barriers, physical health or disability, mental health issues. Insurance investigators will need to afford these customers special provisions. In exceptional circumstances, people with particular cultural backgrounds, people living in rural areas, or people experiencing financial distress may fall into this category.
- Provisions for customers experiencing financial hardship. Enhanced financial hardship provisions will be required, and agents involved in debt collection will be required to have training in the Financial Hardship requirements of the insurance brokers Code of Practice.
What do these changes mean for my business?
The changes to the Code of Practice for insurance providers have been implemented to increase protection for consumer rights and ensure the investigations process works for the customers. So, what does this mean for insurance providers?
- Increased sanctions and fines for non-compliance. If providers are found to be disregarding the regulation changes, the Insurance Council of Australia Board has the power to enforce and impose sanctions and fines. An insurer found to be breaching the new Code may have to pay up to $100,000 in community benefits.
- New processes need to be sought out. These changes will profoundly affect the insurance industry, and companies must be actively seeking ways to improve existing processes.
- Early action is needed. These changes become legally binding as of July 1, 2020, which means your company needs to act immediately. Changes need to be rolled out very quickly to ensure compliance, so you’ll need to seek an organisation that understands all the minor changes and nuances of the new GICoP. Fortunately, Polonious Systems can help.
How can you manage these changes and stay compliant?
The Polonious Systems team have a few tips for handling the General Insurance Code of Conduct changes and ensuring your business remains compliant.
- Improve policies for vulnerable people. Insurance providers will need to take extra care when investigating customers with vulnerabilities and show support for them. This could come in the form of interpreting services, teletypewriter services, clear policies supporting specific vulnerable groups, and other proactive measures.
- Better training for employees. Improved internal policies and training programs will help your employees identify and support vulnerable customers and provide tailored support and customer care.
- Adapting new technologies to achieve compliance. One of the most efficient ways to manage the General Insurance Code of Practice changes is to utilise technology that keeps you compliant and simultaneously improves your business processes. Polonious Systems have developed software that integrates all the latest compliance measures into the core system. Polonious will help you;
- Record more detailed measurements of actions taken in investigations
- Implement a methodology so all processes can be streamlined, automated, and maintain compliance
- Improve surveillance auditing processes
- Improve your company’s overall ROI
- Reduce investigation times, cut down investigation loads, and reduce overall admin costs expended on each case.
If you’d like guidance in managing the new General Insurance Code of Practice, contact Polonious Systems today
Since 2005, Polonious Systems have provided scalable workflow management and risk assessment software to businesses of all shapes and sizes. We’re committed to staying ahead of technological advancements and providing advice and support with IT capabilities across insurance investigation, banking, private investigations, and education. We’re renowned for our wealth of experience, professional conduct, and willingness to support our clients comprehensively. If you’d like assistance in managing and understanding the new General Insurance Code of Practice, contact the Polonious Systems team and find out what we can do for you.