The life insurance industry’s response to the 2015 Trowbridge review of the sector included a commitment by the Financial Services Council (FSC) to having a Life Insurance Code of Practice in place by 1 July 2016. The FSC has been working with its members on the draft Code since August 2015 and continues to develop and improve its content.
Sally Loane, CEO of the FSC, said: “The Code of Practice is an industry first for life insurance and is being developed through extensive public consultation with industry stakeholders, consumer groups and regulators. The Code will commit life insurers to strong standards of customer service, and will enhance consumer protections in the key areas of underwriting and claims.”
“As part of the process of developing the Code, the FSC has discussed the content with a broad range of stakeholders, including peak industry bodies with an interest in life insurance and consumer advocacy groups.”
“The development of industry self-regulation is common across financial services, with the general insurance, banking, customer-owned banking and insurance broking industries all operating similar processes to develop their own codes of practice,” Ms Loane said.
“This will be the first Code of Practice for the life insurance industry and compliance will be mandatory for the FSC’s life insurance members. The Code will also be supported by an independent governance framework ensuring effective Code compliance, which is common practice. ”
“The FSC is looking closely at the issues that have arisen within the life insurance industry recently and will consider these in light of the Code, which is still under development.”
“The Code will be discussed in greater detail at the FSC Life Insurance Conference next Wednesday,” Ms Loane said.
The FSC will also be providing information about the Code and its development to the Senate’s Scrutiny of Financial Advice Inquiry.
Ms Loane said: “The life insurance industry is continuing to undergo significant reform. We support the reforms in the Corporations Amendment (Life Insurance Remuneration Arrangements) Bill 2016, which are designed to improve advised life insurance and remuneration structures. This legislation is a much-needed step in the right direction in removing conflicts from the industry.”
“The Bill has bipartisan support and is currently before the parliament. We urge its swift passage.”
