Insurance industry gets Covid warning

THE corporate regulator has urged the insurance industry, ahead of a landmark test case aimed at clarifying pandemic claims, to proactively contact policyholders and reconsider denied claims for losses arising from Covid-19.

In a letter dated August 23 the Australian Securities and Investments Commission wrote to the Insurance Council of Australia CEO Andrew Hall and National Insurance Brokers Association president Dallas Booth.

The five page message from

ASIC called on the insurance industry to write to customers with business interruption insurance policies keeping them informed of developments.

“We remind insurers of the expectation that claims should be resolved (and paid, where appropriate) in a timely manner to ensure that financial pressures on small businesses are not exacerbated,” the letter from ASIC’s Dr Rhys Bollen said. The result of the second test case, which tested nine policies from five insurers, is expected in the coming weeks.

The outcome of the case could be huge, with billions of dollars on the line.