Submissions summary

Introduction

In July 2019, the State Insurance Regulatory Authority (SIRA) called for stakeholder comment in response to the discussion paper: Customer Service Conduct Principles: proposed licence conditions for insurers operating in SIRA-regulated schemes.

The consultation period opened on 8 July 2019 and closed on 19 August 2019.

Submissions

25 submissions were received. This paper provides a high-level summary of the key themes articulated in those submissions.All non-confidential submissions are available on our website.

Background and context

Stakeholders were invited to respond to seven questions related to a set of five customer service conduct principles, and a compliance/attestation framework. Stakeholders were also invited to provide any further feedback not specifically addressed by the questions.

Discussion paper focus areas

1. Are the customer service conduct principles sufficient and appropriate to protect customers and ensure confidence within the state’s insurance schemes?

There was general support for the customer service conduct principles. Where support was qualified or absent, the themes were:

• Insurers enquiring about the compliance regime, including how adherence to principles would be measured. Some concerns were noted around the establishment of a measurement framework.
• Concern from insurers that adherence to the principles would add additional regulatory burden.
• Questions arose around the impositions of additional requirements beyond existing regulatory and legislative requirements.
• The impact on affordability/pricing of the schemes was raised as a potential implication of implementation.
• The difficulty in balancing the adversarial nature of litigation with the proposed principles.

The concept of an ‘apology’ was raised as a potential issue, specifically, when, how and the implication of making an apology.

Some insurers reported that they already have conditions to regulate conduct and claims management, including those set by their own internal service standard.

Some insurers welcomed the proposed principles as harmonious with existing internal standards, while others stated that they have their own customer service principles.

Some questioned whether the Regulator was best placed to determine customer service conduct principles, with an alternative approach proposed where insurers achieve and maintain accreditation to standards with other Customer Service bodies.

2. Are there other principles of customer service conduct that should be considered?

There was limited commentary on other customer service conduct principles, however suggestions were made for specific measures and actions for accessibility, consistency, accuracy and responsiveness, plus ensuring that rights to independent legal advice were communicated by insurers.

3. How regularly should insurers attest to compliance with the customer service conduct principles? Is an annual attestation sufficient?

Where submissions commented on the frequency of attestation, most agreed that an annual attestation was sufficient, including suggestions that this could form part of existing annual cycles such as business plan lodgement or licence renewals.

Where alternatives were suggested, these included:

• Quarterly.
• Vary frequency per organisation on a risk basis where performance is not being met.
• Independent and random auditing.
• A different approach to self-assessment including a self-assessment governance framework.

Respondents were also interested in breach reporting pathways.

4. What kind of matters should be included in the attestations made to SIRA?

• Action they have taken to ensure compliance with the principles (for example governance and staff training)
• Self-assessment of compliance with each of the principles (for example, an analysis of complaints)

Responses varied and are as follows:

• Any quality assurance programs undertaken should incorporate business unit goals and strategy, minimum standards, continuous improvement frameworks, compliance and risk management.
• Monthly performance reports.
• Insurer systems established to monitor and review compliance.
• Records of non-compliance.
• Training conducted, including orientation programs.
• Examples of correspondence with claimants.
• Customer and provider survey/feedback results.
• Customer complaints.
• Staffing retention strategies.

While most submissions supported self-assessment, some raised concerns at this method, stating that it can be a less effective method in changing behaviours.

The need for clearly defined standards was raised, which would enable both insurers and SIRA to identify when the standards are not met.

5. Should the attestations sought from insurers be at Board and/or management level?

Where comment was made, most submissions supported management level of reporting.

However, suggestion was made for Board reporting in specific circumstances:

• The initial/first attestation.
• Where non-compliance is detected.
• If quarterly reporting is in place, then at least one annually from the Board.
• When SIRA determines this would be appropriate.

Other themes

Submissions included further feedback:

• Concerns were raised about accurate and objective measurement against the principles, in particular in adversarial environments and where insurers must comply with scheme regulations and guidelines that may contrast with the customer service conduct principles.
• A requirement for a statement of consequence of insurer’s not complying with the attestation or making a false attestation.
• It was suggested that the principles accompany a statement of who the customer is and whether the term “customer” is appropriate in a personal injury scheme. It was unclear whether the principles should be extended to 3rd party service providers such as medical service providers.
• Some insurers must already comply with licence conditions and guidelines and questioned whether a new set of conditions is the best way to achieve consistency or whether they were needed.  It was suggested that the principles are embedded into existing regulatory instruments.

Next steps

The information provided through this public consultation has informed a revised set of principles and recommendations for SIRA’s regulation of the customer service conduct principles.

SIRA has now published the Customer Service Conduct Principles applicable to SIRA-regulated schemes. SIRA will work with insurers on their implementation.