Claims Delays Lead to 358 Code Breaches

The Life Insurance Code Compliance Committee (LCCC) has sanctioned a life insurer for failures in claims handling that led to significant delays for customers waiting for decisions.

It was discovered the un-named insurer did not request information from claimants at the earliest available opportunity. The failures occurred between July 2023 and May 2025 and resulted in 358 breaches of the code.

Some customers experienced delays of more than eight months in the assessment of their claims, with the insurer subsequently paying a combined total of $160,000 in interest to 101 customers.

…customers can be left facing unnecessary stress, uncertainty and financial pressure…

Chair of the LCCC, Jan McClelland, said delays in claims handling could have serious consequences for people already experiencing difficult circumstances.

“When an insurer does not ask for the information it needs as early as possible, claims can stall and customers can be left facing unnecessary stress, uncertainty, and financial pressure,” she said.

The LCCC found the failures were linked to:

• Staff shortfalls
• Capability gaps
• Outdated claims practices, and
• Insufficient monitoring and oversight

The LCCC issued the insurer with a formal warning and required it to undertake an independent audit of its compliance with the code. The audit will examine the insurer’s processes for requesting information from claimants, the effectiveness of its corrective actions, and its oversight and monitoring arrangements.

McClelland said the LCCC continues to monitor industry compliance and expects insurers to take proactive steps to identify emerging issues, address delays promptly and prevent customer detriment.

Click here for the full LCCC report. See here for other claims handling reports.