Why is ICNZ so keen on having a Fair Insurance Code, and prickly over criticism directed at the Code?
At an operational level the Code is a useful means of providing a standard approach to offering, selling and administering insurance. This has benefits to insurers as they want customers to have a feeling of ease and security in buying and keeping insurance. It works quite well, with New Zealand having an extremely high uptake of insurance which, in turn, means significant revenue for insurance companies.
At the political level the Code is one of the means used by insurers as they work to prevent or obstruct legislation to regulate the insurance industry. Unrestrained self-regulation is their on-going goal, and the Code is the part of the public face of how they go about it.
Prior to the earthquakes insurers operated without public scrutiny and there seemed to be no shortcomings (unless you dug deep). Should the fairness and suitability of the Code now be successfully challenged then the future of the current level of self-regulation becomes uncertain, and the preferred form of business-as-usual threatened.
The loud and frequent post-earthquake requests for more legislative change and oversight of the conduct of insurers is the crux of much of what is motivating insurers in this revision of the Code. They fear legislative change will put limits on their freedom to operate in a way that is highly favourable to them.
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