Premier Anna Bligh wants insurance companies forced to pay their clients’ full claims if they are not dealt with in a reasonable time.
This proposal, which would require Federal legislation, is contained in the Queensland Government’s submission to the federal parliamentary inquiry into the insurance response to natural disasters.
“We also want to see insurance companies forced to name and shame themselves in local and state newspapers when they repeatedly or seriously breach the Insurance Code of Practice,” Ms Bligh said.
“I wonder how often these breaches would continue if insurance companies knew they’d have to pay to advertise their own bad behaviour.
“What’s clear from the worst disasters in Queensland’s history is that the response of insurance companies has not been good enough and the industry must do better.
“Too many people have had to wait too long,” Ms Bligh said.
The Queensland Government’s suggested 5-point plan is:
1. Strengthen the General Insurance Code of Practice
- The Code should specify a timeframe for decision making and if overall assessment times are not improved the Commonwealth should consider legislating for “automatic claim approvals” where reasonable assessment timeframes are not met.
2. Ombudsman to ‘name and shame’
- The Code could allow the Financial Ombudsman Service FOS to compel an insurer to advertise in a prescribed format in mainstream media (for example local and state newspapers) where there are repeated or serious breaches of the Code.
3. Benchmarks and penalties
- Insurers’ annual reports should be amended to require publication of Internal Dispute Resolution and Financial Ombudsman Service performance to make a company’s record clear to the public.
4. Adoption of a clear, standard definition of flood
- The Commonwealth should amend the Insurance Contracts Act 1984 to ensure that a common, easy to understand definition of ‘flood’ is in place and where there is any doubt the onus of proof should be on the insurer to demonstrate that the given event was not as a result of a flood.
5. Encouragement for insurance companies to use local labour where possible
Insurers should offer the consumer a choice of suppliers, including a choice for builders, goods and services that can be sourced locally.