ASIC has issued a letter reminding general insurers of their obligations as Australian financial services (AFS) licensees when handling insurance claims, especially in response to severe weather events.
General insurers have a responsibility to act efficiently, honestly, and fairly, and resolve claims in a timely manner.
Communities across Australia have been impacted by several severe weather events in recent years. As a result, many Australians have lodged insurance claims to support their recovery.
Insurers must adhere to their obligations when responding to severe weather claims. They are required to communicate transparently with customers regarding their claims, effectively project manage third parties, identify complaints and expressions of dissatisfaction, recognise customers experiencing vulnerability, and sufficiently resource claims handling and dispute resolution functions.
This is an area of continued focus for ASIC, and addressing misconduct in insurance claims handling is a key enforcement priority for ASIC this year.
ASIC expects to see a better response by the industry to the events that have occurred during this summer and more focus by insurers on resolving any outstanding claims related to flood events that occurred in 2022.
ASIC is Australia’s corporate, markets and financial services regulator.