THE Senate Economics Committee has recommended current laws be amended to include consumer protection provisions instead of imposing a whole new regime on the insurance industry.
The move is “eminently sensible”, said insurance partner at Colin Biggers & Paisley lawyers, Mark Radford.
The current Insurance Contracts Act can be made more effective “so that the changes occur within a framework that is well-understood by the industry”, he said.
“This will ensure the reforms fit hand in glove, rather than hang like an ill-fitting suit which is what will happen if the proposed national consumer law is draped over the current regime.”
Radford said Australian consumers are already protected under the existing Insurance Contracts Act, “a tailored regime that essentially contains equivalent protections and rights for consumers in relation to unfair contractual terms, despite contrary allegations from consumer groups”.
He said that many of the examples of consumer detriment provided by those groups were worthy of challenge when the debate is resumed.
“Few other jurisdictions in the world have such a comprehensive, industry-specific piece of consumer protection legislation in place as the Insurance Contracts Act.
“Overlaying it with a separate, less-focussed framework, particularly when the additional consumer benefits are extremely limited would be a mistake and only result in greater complexity and cost for both consumers and insurers,” said Radford.