Insurance companies are reminded of the Monitor’s expectations about insurer communications that were outlined in the Guidelines on the Prohibition on Engaging in False or Misleading Conduct, and specifically in paragraphs 41 to 43 of these Guidelines. In summary, insurance companies, and those acting on their behalf, should take care to explain to policyholders the reasons for any movement in the base premium relative to last year’s policy and the reason that ESL is being charged in the policy.
The Monitor also considers that clear disclosure and transparency in relation to the components of the premium and the changes in each component since the policyholder’s last renewal will help them identify what is driving changes in the total insurance premium. Insurance companies that clearly identify the effect of the emergency services levy reform on their premiums will be less likely to be subject to investigation under the Act by the Insurance Monitor.
In August 2017, the Monitor published an order under Section 30 of the Act that requires insurance companies to provide consumers with 'this year-last year' price comparison information in renewal notices for all relevant policies, commencing from 1 July 2019. A number of insurance companies have commenced doing this.
Minor amendments were made to the section 30 order on 2 November 2018, extending the obligation to certain additional classes of insurance policies and clarifying implications for insurance intermediaries.
Industry compliance status - price comparison order
In a recent communications review conducted by the Insurance Monitor, policy and other communications material issued by insurance companies between approximately April to June 2018 was reviewed.
Insurer's progress implementing premium comparison information disclosure in renewal invoices was noted by the Monitor. In summary:
- Two companies had implemented price comparisons in their home and motor policies, through all distribution channels, including intermediated channels.
- Four companies had implemented price comparisons in home policies only, through all distribution channels, including intermediated channels.
- Two companies had implemented price comparisons in home policies the insurer issued directly, but had not completed implementation through all intermediated channels.
- Four companies had not implemented price comparisons in renewal invoices in home policies through any distribution channel, whether direct or intermediated. Each company stated their brands and intermediaries would be compliant before 1 July 2019.