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Privacy Law and Policy Reporter (PLPR)
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Bargon, Bruce --- "The insurance reference service - An overview" [1995] PrivLawPRpr 2; (1995) 2(1) Privacy Law & Policy Reporter 6

The insurance reference service - An overview

Bruce Bargon outlines Australia's national insurance claims database.

Insurance Reference Service (IRS) is Australia's only national database of insurance claims, providing a comprehensive and easily accessible source of insurance claims, plus commercial credit and public record information. IRS hold claims information on the major classes of general insurance throughout the whole of Australia.

Membership of IRS includes all of Australia's largest domestic insurers and most commercial insurers: AAMI; AIM; American Home Assurance; AMP General; Australian Alliance; Catholic Church; CIC; Club Marine; Colonial Mutual General; Commercial Union; FAI; GIO Australia; HBF; Lumley; Mercantile Mutual; MLC; MMI; Mutual Community; NRMA; NZI; QBE; RAA; RAC; RACQ; RACT; RACV; SGIC-SA; SGIO-WA; Sun Alliance & Royal; Suncorp; TIO; VACC; Western Underwriters; Zurich; as well as 130 insurance assessors, Loss adjusters and claims investigators. The subsidiaries of the above companies are also covered by their IRS membership.

Origins of IRS

The insurance claims database was originally established in 1984 by the Credit Reference Association of Australia Limited (CRAA), Australia's largest credit reporting agency. In 1991, IRS was formed into a separate entity, dedicated specifically to the insurance industry, and under the control of a separate board of directors, selected primarily from the insurance industry. IRS has the strong support of the Insurance Council of Australia (ICA). ICA nominates four of the eight directors on the IRS board.

IRS is a not-for-profit organisation, which is owned by its insurance members. Its operations are geared entirely towards providing a cost-efficient service for members today, and new and improved services for tomorrow. CRAA has been contracted to manage, support and develop the service on IRS's behalf.

Information available to IRS members

Insurance claims:

IRS's insurance claims database provides insurers with an invaluable tool for the identification of fraudulent claims, the verification of claims history and as a measure of the underwriting risk. The insurance claims database currently holds more than 9 million claims, and is increasing by 200,000 per month. Since IRS was formed in 1992, the number of claims recorded has risen from 4 million to 9 million. Following diagrams show the types of claims in the database.

Commercial credit and public record

Members of IRS also have access to the commercial credit and public record files held by the CRAA

The following diagram shows the components of an IRS file.

IRS services

IRS guardian service

The IRS Guardian Service gives members the ability to have their claims, cover notes and renewals automatically checked against the IRS databases.

Insurers provide regular (daily, weekly or monthly) cartridge, magnetic tape, diskette or file transfer, with details of those individuals and businesses that have lodged a claim or who have applied for a new policy. They then receive a report containing details of any prior claim activity.

Online system

IRS members can access the database via a simple personal computer and modem link. This dial-up facility provides a simple and easy means of access to the Pegasus system.

Direct computer to computer links

Direct links between insurers' mainframe computers and the IRS system totally automate the search and retrieval of the IRS database, providing on-line real time information prior to accepting the risk. This service is particularly valuable for the pre-checking of new business proposals.

Direct links provide the insurer with the ideal mix of security, protection and efficiency in a timely and cost-effective manner.

Risk alert

Risk alert allows insurers the additional protection of monitoring individuals and businesses in which they have an interest, for a period of 12 months. As additional claims are added to the database, risk alert notifies the member by mail.

Corporate searches

Up-to-date information from the Australian Securities Commission on companies, and State business and consumer affairs departments on businesses is available on-line.

Electronic White Pages

IRS members also have on-line access to Telecom's Electronic White Pages facility directly from within the IRS Pegasus system.

Services charges

Prices are determined by the services provided and the method of access to the database. The prices noted here are as from 1 July 1994. Membership costs insurers $12,000 pa, and insurance assessors, loss adjusters and claims investigators $465 pa. Costs of IRS inquiries range from $1.05 to $1.65 for various types of computerised inquiries, to $5.05 for phone inquiries.

The risk alert-file monitoring service allows users to monitor a file for adverse activity. Registering interest on a file is free and production of an updated IRS report costs $1.65.


  1. This is an excellent example of what IRS can bring to the underwriter's attention.
  2. Highlights the degree to which fraud, through large numbers of small claims, can be as significant as in small numbers of large claims.
  3. Almost all of the claims are below $1,500 - how big does a claim have to be in your organisation before an assessor is appointed?
  4. Note the occupation of the policyholder and the incidence of Fusion claims
  5. Suncorp are not as bad as they look. Like Lumley, Suncorp identified the high claims incidence of this person and did not invite renewal in mid-1991.

The individual however, changed address and reobtained insurance through another branch of Suncorp in late 1991. Suncorp, like many other insurance companies, did not retain important identity information about the individual (such as date of birth and driver's licence) and their system was not sophisticated enough to identify that this person had previously been declined insurance.


  1. This is an example of 'Where there is smoke, there is fire'.
  2. Person is a director of a company recently in liquidation (check of company file will confirm a wind-up petition in April 1992).
  3. Scheme of arrangement has been instituted under the Bankruptcy Act in May 1992.
  4. Vehicle stolen in September 1992.
  5. Previous claims history is supplemented by recent financial history.

IRS Code of Conduct

IRS operates under an internally developed Code of Conduct. This IRS initiative focuses on the treatment of the privacy of those for whom IRS holds insurance claims information.

The Code places controls over who and when the information can be accessed, promotes the openness of the database to the general public, and incorporates the individual's right of access and correction of their file.

The IRS Code of Conduct is attached together with a recommended letter

Insurance Reference Service Code of Conduct

Basic principles

1. Use of the IRS database is restricted

2. Openness

3. A right of access and correction

The following information assists us in locating files:

Copies of files can be obtained from: Public Access Department Insurance Reference Services Ltd PO Box 964, North Sydney, NSW, 2059 Fax No: (02) 956 7521

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