Competition in the insurance industry has been enhanced by the introduction of a consumer charter by an insurance 'major', AAMI, the Chairman of the Australian Competition and Consumer Commission, Professor Allan Fels, said today.
Launching the charter, Professor Fels said he had been an advocate of the use of charters, particularly in the public and privatised sectors, for some time.
"Put simply, the AAMI charter is a manifestation of the convergence of consumer protection and competition," he said. "One of its attractive features is that in a seamless way it has combined compliance with fair trading laws, state of the art quality customer service features and competitive tool in the marketplace."
Professor Fels said the charter was an important self-regulatory device that had the potential to ensure that the company was less likely to attract regulatory attention.
"It is refreshing to see an initiative like this arising, out of all industries, the insurance industry," Professor Fels said. "It is fair to say that governments have had to reform industry practices because the industry as a whole was not offering the public a basic, reasonable product."
Professor Fels identified the following as essential elements of 'state of the art' consumer charters:
- a commitment to provide clear information about a company's products in all forms;
- service standards that are clearly identified and measurable;
- redress if standards are not met;
- a visible, accessible and responsive complaints handling mechanism;
- an ongoing consultative process with consumers and other interested parties about standards; and
- a unique, rigorous public accountability mechanism by means of an independent audit each year regarding compliance with the charter.
Professor Fels praised the consultative approach taken by AAMI in developing the charter and encouraged other companies to follow suit, including those entering the 'global market'.
"If businesses want to seize the benefits and the immense competitive opportunities which the merging global market will offer then it is important that they offer consumers some basic safeguards," he said.