Bills

Fair Trading (Motor Vehicle Insurers and Repairers) Amendment Bill

Second Reading

The Hon. J.A. DARLEY (16:21): I move:

That this bill be read a second time.

The Fair Trading (Motor Vehicle Insurers and Repairers) Amendment Bill 2021 has been passed in the other place. The object of the bill is to provide for fair, timely and transparent conduct between insurers and repairers so that consumers with damaged motor vehicles are not unduly inconvenienced or unfairly treated as a result of the business practices in, or disputes between, the motor vehicle insurance and repair industries.

People take out insurance for peace of mind expecting their insurer to be there when something goes wrong and to be treated fairly and with dignity and respect. The Economic and Finance Committee conducted an inquiry into the motor vehicle insurance and repair industry in South Australia, discovering that many crash repairers and consumers encountered the following issues while trying to get vehicles repaired as part of an insurance claim:

difficulties in consumers accessing their repairer of choice and claims of insurers steering consumers toward their preferred network of repairers;

the use of second-hand and/or non-original equipment manufacturer parts in repairs and related safety, warranty and liability concerns when using those parts;

a lack of transparency of information, with consumers often not being made fully aware by insurers of all the details related to their repairs and/or insurance policies;

disagreements over the methodology used by crash repairers and insurers to assess the repairs needed, and the cost of said repairs, to restore the motor vehicle back to pre-accident condition, and the quote negotiation process; and

insurers choosing to provide cash settlements to consumers instead of repairing their vehicles.

The committee made a number of recommendations. The primary recommendation was for the South Australian government to introduce legislation to mandate the Motor Vehicle Insurance and Repair Industry Code of Conduct in South Australia as well as provisions for:

a binding mediation process to enable the expedited resolution of internal disputes between motor vehicle insurers and crash repairers, overseen by a suitable independent authority, such as the Small Business Commissioner or the Commissioner for Consumer and Business Services;

appropriate financial penalties for breaches of the code of conduct to ensure compliance by all parties; and

an ongoing review process to ensure that the code of conduct remains up to date and relevant to the current industry requirements.

Should a change to the Motor Vehicle Insurance and Repair Industry Code of Conduct be needed, this can be executed by regulation by the minister of the day and not require changes to the act. Insurers are being asked to be good corporate citizens through the code of conduct but if they are not penalty provisions apply.

The legislation outlines a mandatory code of conduct for all parties involved with motor vehicle dealings, setting a maximum penalty of $100,000 for a corporate body and $20,000 for an individual who fails to comply with the provisions set out in the bill. The code will provide peace of mind for all parties dealing with a motor vehicle insurance dispute.

The Motor Trade Association have worked to bring the industry together and drive the issue with the industry. The genesis of the bill has arisen from the bipartisan recommendations of the committee. The government in the other place contributed to its amendments. I commend the bill to the council.

Debate adjourned on motion of Hon. D.G.E. Hood.