Treasury has published a Discussion Paper on Disclosure in General Insurance: Improving Consumer Understanding.

The Discussion paper seeks views on the recommendations made in the 2017 Senate Economics References Committee’s report into the general insurance industry.

Issues for discussion include:

Premium increases and component pricing included in renewal notices
The recommendations are:

• Strengthening the transparency of general insurance pricing by amending the product disclosure regime in the Corporations Act to require insurers to:

– Disclose the previous year’s premium on insurance renewal notices; and

– Explain premium increases when a request is received from a policyholder.

• Initiate a review of component pricing to establish a framework for amending the Corporations Act to provide component pricing of premiums to policy-holders upon them taking out or renewing an insurance policy, as well as an assessment of the benefits and risks to making such a change.

Standardised definition of key terms
The Committee recommended that the Government work closely with industry and consumer groups to develop and implement standardised definitions of key terms for general insurance.

Review of the Key Facts Sheet
The Committee recommended that the Government undertake a review of the utility of the KFS as a means of product disclosure, with particular regard to the effectiveness of the KFS in improving understanding of home building and contents policies, and merit of extending the use of KFS to other forms of general insurance.