Australia's Revised General Insurance Code Would Make Insurer Promises Legally Enforceable and Auto-Accept Home and Motor Claims After 12 Months, as AFCA Reports 36,022 Complaints

Australia's general insurers have put forward a stricter code of conduct, and the numbers from the industry's complaints scheme explain why. Insurance Business reported on October 22, 2026 that the Insurance Council of Australia has submitted a revised General Insurance Code of Practice to the Australian Securities and Investments Commission, which "will now review the Code for approval." Until ASIC approves it, the Code remains a proposal. The article gives no start date, and says a transition period is expected before the Code applies to new and renewed policies. It does not mention penalties.

The most significant change is legal. For the first time, the Code's obligations would be written into consumer insurance contracts, which would make them contractually enforceable. Policyholders could enforce them through the courts, through the Australian Financial Complaints Authority or through an independent Code Governance Committee. Insurance Council chief executive Andrew Hall said: "Insurance is a promise to be there when people need it most." The change responds to a 2024 House Standing Committee on Economics inquiry, "Flood failure to future fairness", which made 86 recommendations after the 2022 floods. Its chair, Dr Daniel Mulino, described "the collective failure by insurers" to meet their obligations to policyholders. The revised Code addresses the inquiry's calls for ASIC registration, contractual enforceability and automatic acceptance of claims after 12 months.

The automatic acceptance rule is the most concrete protection. Under the revised Code, home and motor vehicle property claims would be automatically accepted after 12 months if no decision had been made because of circumstances within the insurer's control. A senior employee must review any property claim at least three months before the automatic acceptance date, and the review must be completed within 20 business days. If no decision follows, the insurer must give written notice on whether the claim qualifies and what factors are causing the delay. Insurers must also decide a claim or give written reasons for delay within four months, and external experts must deliver their reports within 60 business days of appointment.

Other provisions cover vulnerable customers and settlements. Vulnerability is defined by circumstance and can affect anyone, and a new "Extra Care" framework commits insurers to tailored support and flexibility. The definition of family and domestic violence now includes financial abuse and coercion, with contractually enforceable protections, and an intervention order is not required. For home building claims, a cash settlement must be based on the insurer's reasonable calculation of the cost to the customer of completing the rebuild or repair, and customers can ask for a review within 12 months if they show the amount was insufficient. Several sections state that insurers meet their obligations by providing information to the broker, which makes brokers the conduit for compliance on the policies they place.

The National Insurance Brokers Association supports stronger consumer protections but, in a July 2026 submission described in the article, flagged limits. It noted that the policy prevails over the Code in a conflict and that exclusions apply for failures caused by events beyond the insurer's control. It asked that the broker pass-through not reduce customer protections and that brokers' own Code obligations be recognised, and it recommended shortening the four-month decision period and treating it as an outer limit.

The complaints data show why claims handling is the focus. AFCA's 2025-26 Annual Review, reported by Insurance Business the same day, recorded 36,022 general insurance complaints, up 5% on the previous year and the fifth consecutive year of growth. General insurance was AFCA's second-largest source of complaints behind banking and finance. Claim handling delays were the most common issue for the fifth year running, at 8,246 complaints, up 25%. Claim denials rose 47% to 6,561, and disputes over the amount of a claim rose 20% to 6,376. Denials based on an exclusion or condition rose from 2,503 to 3,384. Motor vehicle comprehensive was the most complained-about product, with 14,430 complaints, up 28%, and home building complaints rose 25% to 8,547 after two years of decline. Consumer credit insurance had 2,636 complaints, travel insurance 2,459 and home contents 1,756.

There was some good news on speed. AFCA closed 37,069 general insurance complaints, more than the 36,022 it received, and the average time to close fell from 96 to 84 days, with about 54% closed within 60 days. More than 15,700 closed at the referral stage and 14,143 during case management, together over 80% of closures. NIBA said broker-related complaints make up under 1% of AFCA complaints. Across all sectors AFCA received 119,949 complaints, up 19%, and awarded $834,197,535 in compensation; 41% of determinations favoured complainants and 59% favoured firms. Supply constraints in skilled trades, repair capacity and parts are lengthening motor and home repair times, according to the article.

AFCA chief ombudsman David Locke said: "Nobody wants to see this number of complaints," and that insurers remain responsible for keeping customers informed and explaining delays, while acknowledging climate and supply-chain pressures. The current Code already requires a claims decision within four months and progress updates at least every 20 business days; the revised Code would add legal force and the 12-month backstop.

What happens next depends on ASIC's review. Readers should treat the details above as the submitted proposal, since ASIC may require changes, and should look to the Insurance Council and ASIC for the final text and commencement date.