The corporate watchdog, Australian Securities & Investments Commissions (ASIC) is reviewing the surveillance and fraud investigation techniques used by general insurers over concerns that they may cause consumers to withdraw valid claims.
Speaking at the annual conference of the Insurance Council of Australia in Sydney yesterday, ASIC Deputy Chairman Peter Kell said that while the Commission recognises the need for insurers to confirm the facts of a claim and ensure only valid claims are paid, insurers need to ensure the risk of consumer detriment caused by fraud investigation does not lead to poor outcomes and inappropriate decisions around claims.
ASIC will convene a stakeholder workshop with consumer and industry representatives to look at how claims can be investigated appropriately and how to prevent claimants withdrawing valid claims because of discomfort with investigation practices, reported The Australian Financial Review.
"It may be that the consumer harms can be addressed, at least in part, through a further strengthening of the principles for the conduct of fraud investigations proposed to be included in the [General Insurance] Code of Conduct," said Mr Kell.
The insurance sector is undertaking a review of the Code that will consider how insurers can better protect and identify vulnerable consumers.