Code of Conduct For The Insurance Sector
A code of conduct adds credibility in any industry or an organisation as it sets an internal guideline as well as an external statement of corporate values and commitments. It can serve as a benchmark against which an organisational performance can be measured.
Like any other sector such as health, hair and beauty, financial services, the country’s insurance sector also needs a well written code of conduct to simply protect the interest of insurance policyholders.With code of conduct, the insurers will be obliged to follow certain rules when providing services to their customers. A code of conduct would also mean setting out timeframes for insurers to respond to claims, complaints and requests for information from customers.
Hence, today, we will talk about the need for the implementation of a standard binding code of conduct for insurers, brokers and agents.Unfortunately, in Fiji, in this day and age, currently there is no standard code of practice for the insurers to follow.
For instance, Australia has a current General Insurance Code of Practise that came into force in July 1, 2014. The Code sets out high standards of service that general insurers must meet when consumers are buying insurance, making claims, experiencing financial hardship, requesting information, or lodging a complaint. These standards include fair and effective mechanisms and timeframes for complaints handling and for processingclaims.
The Code of Practice also commits insurers to respond to catastrophes efficiently, professionally, practically, and in a compassionate manner.
New Zealand also has a somewhat similar practise with the implementation of the Fair Insurance Code 2016 which sets a high benchmark for self-regulation by the insurers so the public can have trust and confidence in their dealings.
Some aspects addressed by the Fair Insurance Code 2016 include: Enhanced, effective communication with the insured, particularly concerning up-front disclosure of key information;Insurers committing to act reasonably when faced with the non-disclosure of relevant information by the insured;Introduction of best-practice timeframes for communicating with the insured at claim time and insurers to train their staff and agents about the Code so that they can fulfil their responsibilities well.
Here at home, the Insurance Regulator, Reserve Bank of Fiji (RBF) has, however, through their various supervisory statements set minimum standards needed for those in the insurance industry to govern themselves – allowing the industry to set their own guidelines as to how to govern their own conduct.
This creates confusion amongst consumers as there is no standard code implemented and enforced by RBF coupled with the fact that insurers do not readily make their individual code of conducts available to consumers. The variation in the code of conducts based on what insurers want to put in the code not only erodes consumer confidence but also leads to the question on the role of Insurance Council.
Fijian consumers are further kept in the dark as currently, RBF has also taken the stance that “The publication of complaints through the media may damage the reputation of insurers in the public eye and could erode public confidence in the Insurance Industry if complaints are not handled with proper procedures” – (in the Insurance Supervision Policy Statement No. 9 – Policy Guideline on Complaints Management)
Information is vital in a progressive society like ours, hence, it is highly recommended that RBF publicises information for consumers benefit and knowledge instead of withholding information from consumers.
The absence of a standard binding code of conduct coupled with the above stance taken by the regulator in fact decreases consumer’s confidence in the industry which perhaps signifies why only 10% of our household is insured in Fiji.
The Council is of the view that the implementation and enforcement of a standard code of conduct in Fiji will ensure high standard of service delivery.
The Council would like to see an independent regulator for consumer protection in the financial sector. This will instil consumer confidence.
The question of who will fund the system will then also play a pivotal role.The Council is suggesting an industry funded model so that the costs of regulation is not met by the taxpayers, but are on those who create the need for regulation. After all, regulation will address adverse actions of insurers toward their policyholders.