Sydney, March 6: The Centre for Women’s Economic Safety (CWES) has released a groundbreaking report demanding a major overhaul in the design of insurance products and legal frameworks to safeguard against financial abuse in Australia.
The report, titled “Designed to Disrupt,” introduces a Financial Safety by Design approach, urging insurers to implement changes that would prevent the manipulation of insurance policies as a form of coercive control.
Rebecca Glenn, CEO of CWES, highlighted the prevalent issue of abusers exploiting insurance policies for harmful purposes, including altering or cancelling joint policies without their partner’s consent, and manipulating claims payments.
This behavior often leaves victims, predominantly women, in precarious financial situations without support from their insurance due to policy limitations.
The report presents 19 recommendations aimed at prompting dialogue among Australia’s 90 general insurers, government bodies, regulatory authorities, and consumer advocacy groups.
Key suggestions include requiring insurers to prevent unauthorized policy cancellations by perpetrators and introducing a standard ‘conduct of others’ clause to enable claims for deliberately damaged property by abusers.
Catherine Fitzpatrick, the report’s author and Adjunct Associate Professor at UNSW School of Social Sciences, criticized the inconsistency across the insurance industry in supporting victim-survivors. Fitzpatrick calls for a modernization of the General Insurance Act to ensure fair treatment and consistent support for victim-survivors, stressing that insurance policies should be designed to foresee and mitigate the risk of domestic and financial abuse.
The report comes ahead of International Women’s Day, emphasizing the urgency for insurers to acknowledge and address the misuse of their products in financial abuse scenarios. It builds on CWES’s efforts following a 2022 paper that led to 14 Australian banks revising their terms to recognize financial abuse.
CWES is advocating for immediate action from the insurance sector to close loopholes and redesign products for enhanced protection against financial abuse, reflecting a commitment to improve financial safety for all Australians.
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