Several life insurance providers have broken away from the Financial Services Council to form a dedicated association launching later this year which will also take responsibility of the new Life Insurance Code of Practice.
The Council of Australian Life Insurers (CALI) will continue to work with the Financial Services Council but will focus on lifting consumer standards in the industry, advocating for affordable advice, and informing Australians of the value of insurance.
The full member list currently includes AIA Australia, Challenger, ClearView, General Reinsurance Life, Hannover Re, Integrity Life, MetLife Australia, MLC Life Insurance, Munich Re, NobleOak, Pacific Life Re, QInsure, RGA Reinsurance, Resolution Life Australasia, SCOR Life & Health, Swiss Re, TAL and Zurich Financial Services.
Some of the associations may remain with the FSC depending on the scope of their business.
A spokesperson for CALI said the Hayne royal commission has led to the life insurance industry undergoing significant changes.
“Given the changing landscape in both regulation and structure, as an industry, we believe the time is right to form a dedicated peak body to focus solely on matters affecting the life insurance industry and its customers.”
The association is still being established and is currently recruiting staff including a chief executive.
FSC chief executive Blake Briggs said the council welcomed the formation of a sector specific association that will complement the FSC’s broader representation.
“The FSC’s priority is continuing to be a strong advocate for our broader membership across funds management, superannuation, financial advice, life insurance and investment platforms, and we welcome the opportunity to collaborate with aligned organisations that represent subsectors within the industry.”
The separation provides the opportunity for life insurance providers to gain fresh representation after the FSC gained heat for its approach to the sector particularly with the Life Insurance Framework.
Enforcer of the code
CALI noted the contributions of the FSC in the industry, including the introduction of the new Life Code which the new association will seek responsibility for.
The FSC published its new code on Wednesday which introduced more than 50 additional consumer protections.
The new Life Code takes effect on 1 July 2023, providing the industry with twelve months to transition and make the necessary systems changes.
The code was developed by the FSC through consultation with industry, consumer groups and regulators, and will continue as industry self-regulation.
Briggs said the new code included support to ensure claimants are supported if they need to be interviewed and added further restrictions on the use of surveillance.
“There will also be greater support for vulnerable consumers, such as by defining gratuitous concurrence and ensuring consent is genuine for First Nations people, as well banning blanket mental health exclusions in the standard terms and conditions on all newly designed contracts.”