A number of Australian insurers, including the larger life companies, have been asked to strengthen their commitment to the Life Insurance Code of Practice, following claims they have not been taking their code obligations seriously.
Voicing her concerns is Anne Brown, independent Chair of the Life Code Compliance Committee, whose task it is to monitor and enforce the FSC’s Life Insurance Code of Practice.
The committee’s 2018-19 Annual Industry Data and Compliance Report, released last week, took aim at a number of key areas which it says the life companies must address.
These areas span issues associated with the integrity of the reporting provided, cultural and training issues, claims breach reporting, and other claims-related complaints issues.
In a statement, the committee’s key findings included:
- Larger subscribers (life companies) need to improve their data quality assurance and reporting, while smaller insurers generally provided high-quality data
- The corporate culture of many subscribers appears not to align with the standards set out in the code, although recent improvements have been noted
- The effectiveness of company staff training programmes and monitoring frameworks is questionable, as evidenced by the large volume of breaches caused by human error
- The under-reporting of breaches relating to claims decision time-frames indicates insurers lack sufficient processes for recording and reporting such breaches
- Increases in claims-related complaints and claims handling time-frames show that insurers need to improve their claims management processes
…self-regulation is a privilege…
In an observation that also acts as a potential warning to the life companies, Brown stressed that self-regulation is a privilege and with that privilege comes “…an obligation to ensure that appropriate mechanisms are in place to comply with the code…”.
Click the image to read the 2018-19 Annual Industry Data and Compliance Report…