The new Code of Practice, released on 11 October, commits insurers to high standards of customer service, continuous improvement, effective communication and to improving confidence in the industry. This will include clarity of language, meeting claims in a reasonable time frame and limiting the use of surveillance. The code will be mandatory for FSC members and will be monitored by an independent body.
FSC chief executive Sally Loane said: “An independent Herbert Smith Freehills report shows that the Code clearly expands the range of obligations imposed by other financial services codes and exceeds the standards imposed by existing law in many areas. In a number of areas it is ground breaking self-regulation.
“Life insurers have come together to develop the Life Insurance Code of Practice as a demonstration of just how serious we are about improving our industry standards for the benefit of all Australians. We all want to strengthen trust.”
The code has been devised in a month-long consultation with a range of consumer and community groups, including regulators, adviser and superannuation organisations, superannuation trustees, legal aid and plaintiff lawyers, the Ombudsman, FSC members and the general public.
TAL chief executive Brett Clark said in a statement: “This Code of Practice represents a significant statement by the industry, and will ensure that insurer practices across the industry are lifted to better meet consumer needs and expectations…..As an industry, we should expect and demand to be held to the highest standards, and it is our challenge now to continue pursuing progress on this Code of Practice to ensure we ultimately deliver greater trust and confidence in the life insurance industry amongst all Australians.”
The Association of Superannuation Funds of Australia also welcomed the code of practice, saying the code would enhance consumer rights and life standards and consistency in the application of processes.
At the same time, MLC Life Insurance chief executive David Hackett said in a statement that the Code, “sets the industry on a clear path to increase trust”.