Name And Shame Bad Insurers: Queensland Premier

Queensland's Premier Anna Bligh wants insurance companies to be forced to pay their clients in full if they can't handle their claims in a reasonable time.

The premier's proposal, which would require federal legislation, is outlined in the Queensland government's submission to the federal parliamentary inquiry into the insurance industry.

The inquiry follows Queensland's summer floods and Cyclone Yasi, after which many victims complained about their insurers delaying or not honouring their policies.

The inquiry is holding public hearings in southeast Queensland on Tuesday and Wednesday.

Ms Bligh wants insurance companies named and shamed if they repeatedly or seriously breach the insurance code of practice.

"I wonder how often these breaches would continue if insurance companies knew they'd have to pay to advertise their own bad behaviour," she said in a statement.

"What's clear from the worst disasters in Queensland's history is that the response of insurance companies has not been good enough and the industry must do better.

"Too many people have had to wait too long."

Besides strengthening assessment times in the code of practice and naming and shaming companies, the Queensland government's suggested five-point plan includes requiring publication of internal dispute resolution and financial ombudsman service performance to make a company's record clear to the public.

The government would also like a clear, standard definition of flood, and insurance companies bound to use local labour where possible.

Tuesday's public hearing at Graceville, a suburb in Brisbane's south that was flooded in January, will hear evidence from Caxton Legal Service, among other witnesses.

There will also be a hearing at Ipswich, west of Brisbane, that will hear from Mayor Paul Pisasale.