Australian Competition and Consumer Commission Chairman, Mr Graeme Samuel, has rejected the suggestion that the ACCC is to blame for any confusion arising from differences in flood and storm damage definitions used by insurance companies.
"The Australian Financial Review has published claims said to have been made by the insurance industry and the Insurance Council of Australia that industry moves to standardise definitions had been stalled by the ACCC on competition grounds.
"This is simply incorrect. From early 2006, the ACCC has responded to queries from the ICA in which they sought guidance in relation to the application of the competition provisions of the Trade Practices Act 1974 to such a proposal.
"The ACCC has provided written responses on three occasions in April 2006, November 2006 and May 2007.
"At all times the ACCC has advised industry that they need to consider for themselves any competition issues that may arise from their proposal. The industry is well placed to obtain independent advice in this area.
"This said, the ACCC has made it clear to the ICA that development of a standard definition for flood would be unlikely to raise concerns in itself where insurers were otherwise able to continue to offer different levels of coverage, for example, should an insurer want to offer a different level of protection.
"In the event that the industry had ongoing concerns over the application of competition laws, the ACCC has made the ICA aware of the public interest authorisation process–a process that could have been completed within months. To this date the ICA and the insurance industry have still not sought an authorisation for its proposed standard definition for flood.
"Having pondered this important issue for a number of years–the insurance industry has itself to blame for delays in progress."
