Showing posts from February 15, 2015

Comments on the ICNZ Revised Fair Insurance Code - Part 2

The whole viability of the insurance industry depends upon utmost good faith which, according to ICNZ on their website here, means: An insurance policy is a contract of ‘utmost good faith’ between the insurer and the customer. The insurer is required to observe and honour the contract conditions. The customer is required to disclose to the insurer all material facts that could affect the risk. For example, a person who travels overseas and leaves their house empty needs to tell their insurer, as an empty house is more risky to insure than an occupied one. Failure to tell your insurance company everything they need to know to assess your risk accurately may jeopardise your insurance cover. If in doubt about what you need to declare, ask your insurance company. A rule of thumb is that you should declare any information that would make the insurer alter the terms and conditions of your contract.As is easily seen, the weight of the so-called “utmost good faith” obligation falls entirely …

Comments on the ICNZ Revised Fair Insurance Code - Part 1

An initial reading of the Revised Code creates the impression of it being a reasonable document. If you were not familiar with what had happened with insurance claims post-earthquake a second glance would seem unnecessary. To not take a second look at the words used, but bask in the warmth and comfort promised by the publicity hype, would be a dangerous oversight. Dangerous because post-earthquake insurance claims created an environment which highlighted both new and existing problems, and these have not been dealt with. Disasters bring about the unexpected, create new problems, and put people on the spot. The major initial problem was the scale of the work facing insurance companies. As with EQC and the Christchurch City Council, the scale of the problem was beyond both their organisational ability to respond and also the adaptive capacity of most of the leadership. Adding complexity to this was was the rapid involvement of re-insurers whose sole interest was reducing their exposu…

The Revised Fair Insurance Code

There has been a flurry of insurance related developments this month. Recently EQC covertly released a Customer Interaction Review on how they had performed and on Monday Vero released a report about Canterbury four years on, outlining Vero's experiences, the improvements made to it's processes and how it envisages future disasters should be handled.

The most significant release has been that of the Insurance Council of New Zealand (ICNZ) who announced their Revised Fair Insurance Code. The Fair Insurance Code is the code of conduct all major insurers have signed up to and, in general terms, it outlines how an insurer is required to behave.

Despite the glowing terms with which ICNZ have described their Revised Code a close reading of it shows they have produced very little in the way of a fair, transparent or customer friendly way of doing business.

The effect of much of what was raised by submissions has been changes to treat some of the surface issues, but not …