Dr Michael Schaper’s final report on the independent review of the Motor Vehicle Insurance and Repair Industry Code of Conduct provided 15 recommendations in response to the review’s terms of reference.
Schaper said a range of stakeholders were consulted in the review process, including government bodies, regulators, members of the Code’s Conduct Administration Committee (CAC), insurers and other parties. Twenty-one interviews were undertaken with 35 participants, along with two parties lodging written submissions.
“The review comes at a time of significant change,” the report said. “The Code has now become mandatory in two state jurisdictions (NSW and SA) and may also be extended to Tasmania. At the same time, traditional work practices in the industry are changing as increased automation and artificial intelligence is starting to become more significant. However, in recent years the number of parties using the Code appears to have declined significantly.
“Amongst stakeholders, the overall view is that while the main aspects of the current system are operating satisfactorily, there is a need for change in some areas. These responses suggest the need for a number of reforms.”
The CAC will now work with its membership bodies to review Schaper’s recommendations.
The Motor Trades Association of Australia (MTAA) welcomed the report, saying it was “thorough and balanced” and that insurers and repairers should be compelled to resolve disputes quickly and fairly.
“A wake-up call for motorists and industry, recommendations to the independent review have called for a greater consumer focus and a major overhaul of the voluntary Code governing the motor vehicle insurance and repair industries,” said Geoff Gwilym, CEO of the MTAA and CEO of the VACC.
“There is considerable work ahead of us, and the Motor Trades Association of Australia are committed to getting it right. Dr Schaper’s review sets about to improve the Code across both the insurance and vehicle repair sectors and that is why the MTAA is supporting all 15 recommendations in full.”
RECOMMENDATIONS AND NEXT STEPS
- Clarify and strengthen provisions relating to dispute resolution
Shorten timeframes for written acknowledgement of receipt of a dispute. Remove the mandatory requirement for a written report for all mediations. Educate more widely.
- Update the Code’s language, format and presentation
Make the Code easier to read and follow. Update sequencing and presentation. Remove or rewrite outdated text. Ensure it is legally rigorous if contested in legal proceedings.
- Undertake greater public promotion of the Code
Educate stakeholders about the activities and achievements of the Code. Compile a comprehensive list of key stakeholders. Publish update bulletins regularly. Consider also using social media.
- Work more closely with regulators
Engage more proactively with small business commissioners, the ACCC, state governments and other bodies who have an interest in the Code.
- Update the Code website URL and contents
Improve the accessibility and ease of use of online information. Consider adopting a more user-friendly URL. Rewrite website content to make it easier to understand the scheme.
- Introduce sanctions for breaches of the Code
Empower the CAC to remove parties who do not comply with the Code. Monitor compliance by member parties. Require all new membership applications to be approved by the CAC.
- Appoint an independent CAC Chair and Deputy Chair
Adopt contemporary best practice by creating two additional members of the CAC who can provide an independent perspective, enhance governance, and drive external engagement.
- Clarify CAC governance, membership, voting and training
Introduce three-year terms for CAC members. Introduce maximum term limits. Offer training in corporate governance. Ensure more gender diversity.
- Incorporate the CAC as a formal legal entity
Adopt an association, company or other corporate structure for the CAC. Ensure this entity holds the assets, intellectual property and finances of the CAC.
- Better resource the CAC
Provide an annual operating budget for the work of the CAC, rather than continuing to rely on voluntary labour. Employ a part-time administrator. Remunerate independent members.
- Codify practices relating to the use of artificial intelligence
Address the issues emerging from the growing use of AI. Begin an active education campaign to inform the industry of these.
- Review educational requirements
Update the education and qualification-related provisions of the Code. Actively examine if signatories are providing adequate education and training to their assessor and estimator staff.
- A greater consumer focus
Explicitly recognise the importance of consumers within the preamble of the Code.
- Clarify the role of third-party representatives
Define a third-party representative and provide a mechanism for them to sign up to the Code if they wish. Spell out their roles, rights and responsibilities within the Code.
- Change the frequency and focus of future Code reviews
Reduce the frequency of Code reviews. Consider examining decarbonisation, artificial intelligence, training needs, data trends, and future legal status of the Code in the next review.