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You are viewing the version of the document as on 2022-02-28.

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    2022-02-28

ICOBS 6A.6 Cancellation of automatic renewal

Application

ICOBS 6A.6.1R

1This section applies in relation to all general insurance contracts entered into with consumers which have an automatic renewal feature except for:

  1. (1)

    private health or medical insurance; and

  2. (2)

    pet insurance.

Purpose

ICOBS 6A.6.2G

The purpose of this section is to support Treating Customers Fairly outcome 6 – “Consumers do not face unreasonable post-sale barriers imposed by firms to change product, switch provider, submit a claim or make a complaint”, by making it easier for consumers who wish to prevent their policy from automatically renewing to cancel this feature of their policy.

Requirement for a range of cancellation methods

ICOBS 6A.6.3R

A firm must provide a consumer with easy and accessible methods for cancelling the automatic renewal feature in the consumer’s contract.

ICOBS 6A.6.4R
  1. (1)

    The methods provided by a firm in accordance with ICOBS 6A.6.3R must include at least all the methods by which a consumer is able to purchase a new policy with the firm.

  2. (2)

    A firm must consider the needs of its customers when determining what cancellation methods it provides.

ICOBS 6A.6.5G

An easy and accessible method for cancelling an automatic renewal feature is a method that does not place any unnecessary barriers on the consumer who uses it. Unnecessary barriers may include one or both of the following:

  1. (1)

    unreasonably longer call waiting times to cancel the automatic renewal feature than to purchase a new policy; and/or

  2. (2)

    unnecessary questions or steps before the consumer is able to confirm their instructions to cancel the automatic renewal feature.

Times a consumer may cancel

ICOBS 6A.6.6R

A firm must allow the consumer to exercise their right to cancel the automatic renewal feature:

  1. (1)

    at the time the consumer purchases the policy and at any time during the duration of the policy; and

  2. (2)

    free of charge.