The Financial Services Council has this week released its new Life Insurance Code of Practice. In this article, the FSC’s Nick Kirwan reflects on the changes included in the updated code and the rationale supporting these changes…
The Financial Services Council (FSC) has published the new Life Insurance Code of Practice (new Life Code) which introduces more than 50 important consumer protections that cover every aspect of how customers interact with their life insurer
The new Life code is an important commitment from the industry to do more than what is simply in the law across all aspects of the consumer experience, whether that be underwriting, sales, policy design and disclosure requirements, or supporting customers through the claims process.
The Life Industry makes this commitment because it understands the importance of the promise to be there at every customer’s time of need. Taking effect from 1 July next year, the new Life Code will ensure Australians get fair treatment and excellent standards of service from their life insurer.
The area with the most new protections is for people who need to make a claim on their policy
The area with the most new protections is for people who need to make a claim on their policy. The new Life Code recognises that when people make a claim it will be at a time when they are ill or injured, or may even have lost a loved one. In short, it’s a time when people are vulnerable. That is why the new protections in claims are all about ensuring that the claims process isn’t daunting.
It will mean that everyone can approach making a claim with the confidence of knowing that they will be helped and supported throughout the process, that everything will be fully explained, and that they will be treated fairly.
In sales, new protections will ensure people will not be pressured into taking out life insurance and will have longer to change their mind and get a full refund. The industry hopes people will better understand their policy and keep it for longer if they’ve made a considered decision to take it out.
There are also new protections in underwriting to ensure decisions are explained, to ensure that communications are clear and use plain language, and additional support for First Nations people, victims of family and domestic violence, and for people experiencing a mental health condition.
We know people don’t want to have to read the new Life Code from cover to cover to find the answers they need. So the new Life Code has been written in plain-language and structured in a way that makes it easier to read, and easier to navigate to help people find the information they need quickly and easily.
Compliance with the new Life Code will be mandatory for all FSC life insurance members and will be independently monitored by the Life Code Compliance Committee, which will have increased powers to impose sanctions for any breaches.
It has been developed in consultation with a broad range of stakeholders including regulators, industry, consumer advocates and community organisations.
The FSC will now focus on working with our life insurance members to implement the new Life Code with all the new consumer protections so that, wherever your life’s journey takes you, your life insurer will be with you every step of the way.
Click here or on the image below to view the updated FSC Life Insurance Code of Practice.
And click here to view a summary of the 50 changes built in to the new Life Code.