General Insurance Code of Practice and Hardship
As of July 2021, the new general insurance code of practice came in to effect. As Debt Recoveries Australia services a significant portion of the insurance industry, it has been of the utmost importance that we remain aware of the changes to the code and how they affect our clients, their insured customers and any third parties that recovery may be sought from in a claim.
Of particular relevance to our operations has been the changes to the code are parts 9 and 10 which deal with vulnerable customers and those facing financial hardship.
DRA has ongoing controls in place to ensure our teams are well trained in these areas.
For further information on the changes, please see the below extracts from the code as published by the Insurance Council of Australia. For access to the full code, please click here.
Part 9: Supporting customers experiencing vulnerability
This part applies to Retail Insurance products only.
We are committed to taking extra care with customers who experience vulnerability. We recognise that a person’s vulnerabilities can give rise to unique needs, and that their needs can change over time and in response to particular situations.
A person’s vulnerability may be due to a range of factors such as:
mental health conditions;
physical health conditions;
Aboriginal or Torres Strait Islander status;
remote location; or
We encourage you to tell us about your vulnerability so that we can work with you to arrange support — otherwise, there is a risk that we may not find out about it.
If you are experiencing Financial Hardship, see part 10 of the Code about the support we can provide to you.
Internal policies and training
We will have a publicly available policy about how we will support you if you are affected by family violence. This policy will be published on our website.
We will have internal policies and training appropriate to our Employees’ roles to help them:
understand if you may be vulnerable;
decide about how best, and to what extent, we can support you;
take account of your particular needs or vulnerability; and
engage with you with sensitivity, dignity, respect and compassion — this may include arranging additional support, for example referring you to people, or services, with specialist training and experience.
If you tell us, or we identify, that due to a vulnerability you need additional support or assistance, we will work with you and try to find a suitable, sensitive and compassionate way for us to proceed. We will do this as early as practicable and we will protect your right to privacy.
If you tell us, or we identify, that you need additional support from someone else (for example, a lawyer, consumer representative, interpreter or friend), then we will recognise this and allow for it in all reasonable ways. We will try to make sure our processes are flexible enough to recognise the authority of your support person.
Additional support may include making it easier for you to communicate with us, referring you to a financial counsellor or an appropriate community support service.
If you need support to meet identification requirements, then we will take reasonable measures to support you — particularly if you are from an Aboriginal or Torres Strait Islander community or a non-English speaking background. Our approach to supporting you with verification and identification will be flexible.
Where practicable, we will provide access to an interpreter if you ask us to, or if we need an interpreter to communicate effectively with you. We will record if an interpreter is used or if there are reasons we are unable to arrange one.
We will arrange relevant training for our Employees who are likely to be involved in communications requiring an interpreter.
On our website there will be an easy-to- find link to:
information on interpreting services;
teletypewriter services (TTYs);
any information on our products that we have translated into other languages; and
any other relevant information for people with language barriers.
When developing our internal processes and procedures we will take into account those who have a past or current mental health condition by doing the following:
at a minimum, we will design and sell our products and apply their terms in compliance with the requirements of the Disability Discrimination Act 1992 and/or any relevant State or Territory anti-discrimination requirements;
we will treat people with any past or current mental health condition fairly;
we will only ask relevant questions when deciding whether to provide cover for a pre-existing mental health condition;
if we cannot provide you with cover for that condition we will tell you about your right to ask us for the information relied on when assessing your application. If you ask for that information, then we will give it to you as set out in part 12 of the Code.
Part 10: Financial Hardship
Individuals entitled to support
Financial Hardship means you have difficulty meeting your financial obligations to us.
You have a right to ask us to fast-track a claim if you have an urgent financial need. See paragraph 64.
You may be entitled to support because you are suffering Financial Hardship if you are:
- an individual Insured or a Third Party Beneficiary who owes us money — including an excess — under an insurance policy we have issued; or
- an individual and we are seeking to recover money from you because we believe you caused damage or loss to either an Insured, or a Third Party Beneficiary who we cover under an insurance
The support that we provide does not include support with paying the premiums under an insurance policy we have issued.
Identifying people experiencing Financial Hardship
We will have internal policies and training appropriate to our Employees’ roles to help them to identify if you are experiencing Financial Hardship and decide how they may be able to provide support to you.
We encourage you or your representative to tell us about your Financial Hardship so that we can work with you to discuss your situation and the options available to support you — otherwise there is a risk that we may not find out about it.
If you tell us, or we identify, that you are experiencing Financial Hardship, we will give you:
- details about how to apply for Financial Hardship support; and
- if appropriate, contact details for the National Debt Helpline: 1800 007 007.
Keeping you informed
We will communicate with you about your application and where possible, we will use your preferred method of communication.
If we know that you have nominated a representative, then we will keep that person updated about your request for Financial Hardship support, unless you tell us not to.
Assessing your request for Financial Hardship support
When we are assessing your request for Financial Hardship support, we will consider all reasonable evidence — for example:
evidence of serious illness that prevents you from earning income;
evidence of a disability, including a disability caused by mental illness;
if you are a Centrelink client, your Centrelink statements; and
evidence of your unemployment.
We will request information from you only if it is reasonably necessary for us to assess your application for Financial Hardship support.
If, after we receive your application for Financial Hardship support, we need more information from you before we can make our decision, then we will:
tell you the information we need as early as possible; and
be specific about the information we need.
You have 21 Calendar Days from the date of our request under paragraph 116 to provide that information to us, unless we have agreed to a different timeframe.
Putting recovery on hold
If we are taking action to recover an amount from you, we will put that action on hold if we identify that you are experiencing Financial Hardship, or if you ask us for Financial Hardship support in relation to that amount.
When we put the action on hold, we will contact any Collection Agent or solicitor that we have appointed and tell them the action is on hold.
The action will stay on hold until we have assessed your application for Financial Hardship and notified you of our decision about it.
Making our decision
We will tell you in writing of our decision about whether to give you Financial Hardship support within 21 Calendar Days after we receive your application, unless we have asked you to provide us with more information.
If we do ask you for more information under paragraph 116 and:
you provide all information we requested, then within 21 Calendar Days of receiving it we will tell you in writing, our decision about whether to give you Financial Hardship support; or
you do not provide all information we requested within 21 Calendar Days (or by a later date we agree to), then within 7 Calendar Days of that deadline passing, we will tell you in writing, our decision about whether to give you Financial Hardship support.
If you are entitled to Financial Hardship support
If we decide you are entitled to Financial Hardship support, then we will work with you to implement an arrangement that could include any one or more of the following:
- delaying the date on which the payment must be made;
- paying us in instalments — we will not refuse a reasonable request from you to pay the amount you owe in instalments;
- paying a reduced lump sum amount;
- delaying one or more instalment payments for an agreed period;
- deducting the excess from the claim amount we pay you;
- waiving cancellation fees.
We will confirm the agreed arrangement with you. Where possible this will be in your preferred method of communication.
If we agree you are entitled to Financial Hardship support, but we are unable to agree about how you can be supported, then we will tell you in writing, about our Complaints process.
Releasing your debt
If we decide you are entitled to Financial Hardship support, then you may ask us to release, discharge, or waive a debt or obligation. However, you are not automatically entitled to this.
If we agree to release, discharge or waive a debt or obligation, then we will confirm this with you in writing.
You can ask us to notify any financial institution with an interest in your insurance policy that you are entitled to Financial Hardship support and, if applicable, that we have released, discharged or waived a debt or obligation. If you ask us to do this, then we will tell them about this in writing.
If you are not entitled to Financial Hardship support
If we decide that you are not entitled to Financial Hardship support, we will tell you the reasons for our decision and about our Complaints process. Where possible, we will tell you this in your preferred method of communication.
If your circumstances change, then you may re-apply for Financial Hardship support in relation to the amount you owe. However, for any further application you make, it will be at our discretion whether we again put any recovery action on hold.
Standards for collecting money
We, as well as any Collection Agent or solicitor collecting money for us, will comply with the Debt collection guideline: for collectors and creditors published by the Australian Competition and Consumer Commission and the Australian Securities and Investments Commission.
We, as well as any Collection Agent or solicitor collecting money for us, are required to:
understand the Financial Hardship requirements in the Code; and
receive training to help identify whether you might need Financial Hardship support.
When we, our Collection Agent or solicitor, first communicates with you about any money owed, then we will ensure that
this communication will provide you with information to show that the amount we are seeking to recover from you is fair and reasonable. This may include:
information on the relevant loss and/or damage and the claim;
the actual cost of completed repairs; and
the evidence we relied on when we calculated the amount.
This communication will also include:
information about our Financial Hardship process; and
contact details to enable you to contact us to discuss Financial Hardship support or if you have any questions.
If our Collection Agent or solicitor communicates with you about money owed, then that communication will identify us as the insurer that they are acting on behalf of and will specify the nature of our claim against you.
If you tell our Collection Agent or solicitor that you are experiencing Financial Hardship, then they must notify us and give you information in writing about our Financial Hardship process.
If you tell us that you intend to declare bankruptcy, then we will work with you (or your representative) to agree on the amount owed. We will also give you written confirmation of that amount for the purposes of your declaration of bankruptcy.
If we cannot agree on an amount, then we will provide details of our Complaints process in writing.