The Financial Services Council and the life insurance industry have published the new Life Insurance Code of Practice which introduces more than 50 additional consumer protections, especially around claims.
CEO of the FSC, Blake Briggs says in a statement that the new Life Code’s additional consumer protections “…will ensure Australians get fair treatment and higher standards of service from their life insurer.”
Briggs says that the Life Code introduces a range of improved consumer protections, “…especially when Australians need to claim on their life insurance policy, such as ensuring claimants are supported if they need to be interviewed and further restrictions on the use of surveillance.”
He adds there will also be greater support for vulnerable consumers, “…such as by defining gratuitous concurrence and ensuring consent is genuine for First Nations people, as well banning blanket mental health exclusions in the standard terms and conditions on all newly designed contracts.”
Briggs explains that the Life Code is the industry’s commitment to customers for consistent service standards that cover every aspect of a customer’s journey, from taking out a policy to making a claim, and that compliance is monitored by the independent Life Code Compliance Committee.
“Through consultation with industry, consumer groups, and regulators, the FSC has developed the Life Code to ensure consumers can enjoy the security of life insurance with confidence.”
The new Life Code takes effect on 1 July 2023, providing the industry with 12 months to transition and make the necessary systems changes.
It also includes an enhanced role for the Life Code Compliance Committee by providing the Committee with increased powers to impose sanctions for breaches, including potentially requiring a community benefit payment to a charity.
The FSC says the code will continue as industry self-regulation and that subscription to it is mandatory for all of the FSC’s life insurance members.
“The life insurance industry undertakes, however, to engage with ASIC on our intent to have the Life Code registered with ASIC under its Enforceable Code Regime in the future.”
To view a copy of the new Life Code click here or read a summary of the enhanced consumer protections here.
To see our Adviser Focus in which the FSC’s Nick Kirwan reflects on the changes included in the updated code and the rationale supporting these changes click here.
