New Life Insurance Code of Practice Takes Effect


The New Life Insurance Code of Practice for the Australian market came into effect on 1 July 2023.

FSC CEO, Blake Briggs says the changes provide enhanced consumer protections in the life insurance sector. The new code introduces more than 50 new protections for consumers across all aspects of their interaction with life insurers.

The FSC says these protections encompass product design, sales practices and claim processes.

It adds that notably the New Life Code “…includes vital safeguards for customers during periods of vulnerability, financial hardship, or when experiencing mental health conditions.”

The council notes too that the industry is committed to prioritising consumer interests and ensuring transparency and fairness in life insurance services.

Along with the launch of the New Life Code, it has released a detailed guide on life insurance law that outlines the most important legal rights and obligations for life insurance customers, as well as a consumer fact sheet that details key information about life insurance premiums.

A document on the FSC website entitled Over 50 New Consumer Protections provides detail on the key improvements in the New Life Insurance Code of Practice. The sections highlighted include:

  • Sales – industry wants people to make a considered decision to take out life insurance so that they understand their policy and will keep it for longer
  • Understanding the current and future cost – industry doesn’t want people to get an unexpected premium increase
  • Vulnerable customers – industry wants people to feel supported through the ups and downs of their life
  • Underwriting – industry wants people to understand the reasons why underwriting decisions are made and that they can be reviewed
  • Mental health – ensuring that people are supported when they experience a mental health condition
  • Claims – ensuring that people feel supported throughout the claims process
  • Sanctions – to help improve consumer confidence in the code
  • Clarity & Navigation – making the code easier to navigate and easier to read
Source: FSC

Meanwhile, Zurich Financial Services Australia has welcomed the new code, noting that it was developed in consultation with life insurers, including itself.

Justin Delaney, Chief Executive Officer, Zurich Australia & New Zealand, says the new code “…represents a significant milestone for Australian life insurers, underlining the industry’s commitment to protecting customers and continually evolving.”

He says the company supports “…maintaining an industry-wide approach that holds all insurers to a high standard. The new code will impact all facets of our customer interactions, from how products are designed, to how they are sold, through to the claims experience.”

Delaney adds the new code reflects numerous changes to the first code introduced in 2016, spanning sales, underwriting, premium disclosures, claims, mental health, vulnerable customers, sanctions, clarity on navigating the code, and the introduction of new enforceable provisions.

Click here to see the full document.