The Use of Insurance Codes of Practice - Are Consumers Getting a "Fair Go"

Voluntary codes of practice are currently favoured in New Zealand as a means of providing a framework for self regulation by industry groups. The insurance industry is no exception. A number of industry bodies have adopted codes of practice, which include general guidance and disciplinary codes. This article examines these voluntary codes of practice and questions whether consumers benefit from this form of insurance regulation. This is not a speculative enquiry. Because of the importance of insurance as a mechanism for risk transfer to our society, our economy, and in particular, to consumers, a clear understanding of these codes of practice, and in particular their legal effect and their benefits and limitations as a rule-making mechanism is essential.