FSC Boosts Consumer Provisions In Code of Practice

The Financial Services Council (FSC) will strengthen its yet to be released Life Insurance Code of Practice following recent adverse media coverage highlighting claims-related issues within the life insurance sector.

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FSC CEO, Sally Loane

Addressing the FSC Life Insurance Conference, FSC Chief Executive, Sally Loane said the strengthening was focused particularly on those parts of the Code dealing with consumer protections.

“We have added a Steering Group to our Code development process which will include consumer representatives, the Financial Rights Legal Centre and the Consumer Action Law Centre, as well as senior life insurance executives,” Loane said.

“The consumer representatives will work closely with our members to identify where we need to strengthen consumer protections in our Code.”

Loane also stated that disclosure and communication with consumers would be a central part of the Code with key policy information to be provided in plain language.

In her opening address Loane referenced the recent issues with CommInsure and stated the claims process had also been central in the development of the Code.

“We are developing this Code to show how serious we are about improving our industry for the benefit of customers and consumers.”

“We are looking at the sort of additional support that vulnerable consumers may need if they are having difficulty with the process of buying insurance or making a claim. This could include identifying and supporting people suffering from mental illness, elderly customers, those who require the use of an interpreter, people living in remote communities, or those customers with very low levels of literacy.”

Loane reminded the conference that the Code will be an FSC standard and thus mandatory for its life insurer members and was an opportunity to reverse consumer sentiment.

“We are developing this Code to show how serious we are about improving our industry for the benefit of customers and consumers. We want to re-build trust. We want Australians to understand that life insurance can and does measurably improve lives.”

  • WB

    Sally;
    You state that strengthening the code follows claims related issues raised in the media. There has been no mention that the problems regarding claims were the result of bad or inappropriate advice provided by advisers. Now if the FSC recognises that the blame for these issues lays squarely with the insurance company, then would you please explain to all readers of riskinfo why the FSC is penalising risk advisers in its push for a massive reduction in how we are remunerated for the vital services we provide?

  • David Bourke

    No mention of working with advisers to develop the code!! Why would she deal with Advisers we are the ones who talk to consumers!! Also Sally Loane will not answer the very simplistic question: “What are the Consumer Benefits” under the Life Insurance Framework she constantly communicates.

  • alistsir

    Truly a worry for the consumer is to have a code developed by the FSC. Much like placing dracula in charge of the blood bank….no mention of the adviser as we have a better insight into consumers, deal with the claims, and are there to advocate for them and all while we get kicked in the guts for it. No clarity on what a lapse is, or churning vs best interest…no none of that and yet the regulators seem okay with this. The FSC code of conduct should not be written with the consent of insurance executives…the very people who according to the Four Corners report, places profit before all else…..the could not care about the consumer and much less for the adviser.