What is the primary purpose of the Insurance Fair Conduct Act?

The primary purpose of the Insurance Fair Conduct Act is to protect clients from unfair practices within the insurance industry. This law establishes standards for the conduct of insurance companies, ensuring they treat policyholders fairly and uphold the terms of their policies. It aims to prevent insurers from acting in bad faith, which can include delaying or denying claims without a valid reason, or failing to conduct a proper investigation of claims.

By promoting fair treatment, the Act enhances consumer confidence in the insurance system and provides a legal recourse for policyholders who feel that their insurer has not acted appropriately. This makes the insurance market more equitable and sustainable for consumers by ensuring that their rights are safeguarded against potential abuses by insurers.

In contrast to this, other options such as facilitating competition or increasing premiums do not align with the core focus of the Act, which is specifically about fairness and protection for clients. Lowering competitive standards would contradict the aim of fostering responsible practices and would not be beneficial for consumers.