Work on an updated industry code has moved to the next phase, the Insurance Council of Australia says, as consumer groups continue to voice concerns over the proposed redraft.

Consumer advocates are among the stakeholders that made 28 submissions to a review that closed last week.

The council says submissions are “being analysed and considered over the coming weeks. All submissions will be published in due course, subject to any confidentiality requirements. ICA remains committed to a transparent and thorough review process and will provide further updates as the review progresses.”

Consumer Action Law Centre says the redrafted code of practice features “meaningful progress” such as stronger cash settlement protections and a proposal to make the code contractually enforceable.

“If implemented effectively, these changes have the potential to materially improve consumer outcomes,” the centre said.

“However, contractual enforceability will only improve consumer outcomes if the protections most critical to preventing consumer harm and enabling consumers to engage safely and effectively with insurance services are contained within the code itself.

“We are concerned that a number of important consumer protections continue to sit in non-binding guidance rather than enforceable code obligations.”

The centre says many issues associated with consumer harm remain unaddressed.

“As a result, important gaps remain in several areas critical to consumer recovery, participation and outcomes.”

The centre has made 21 recommendations in its submission.

One focuses on the new measure requiring insurers to automatically accept a home or motor claim if no decision has been made after 12 months, subject to defined exceptions.

“Automatic acceptance is an important accountability mechanism,” the centre said. “Exceptions should accommodate genuinely exceptional circumstances, not operate as a mechanism for avoiding accountability for delayed claims.

“Where an insurer relies on an exception, the code should require the insurer to actively manage the claim, take reasonable steps to minimise delay and provide consumers with clear and timely information about claim progress.”

Claims Hero has tabled 35 proposals in its submission.

“This draft has fallen significantly short,” MD Luke Dugdell said. “We have focused our submission on principled recommendations, because addressing every deficient obligation individually would have required hundreds of pages of feedback.

“It is clear that the code has been drafted through a legal lens, with the interests of insurers prioritised.”