The Council of Australian Life Insurers (CALI) has released a best practice guidance on family and domestic violence, setting a benchmark for “compassionate and effective engagement with victim-survivors”.
According to CALI, the guidance focuses on creating a framework and new processes that foster trust and avoid re-traumatisation.
This includes building flexibility into product design to address financial abuse and coercive control, simplifying policy changes for victim-survivors, and introducing additional security measures to enhance privacy and confidentiality.
The guidance also noted the importance of considering the forfeiture rule when reviewing claims made by perpetrators of domestic violence and handling queries and claims sensitively to minimise the need for victim-survivors to retell their story.
Additionally, CALI included the need for insurers to provide victim-survivors access to additional resources, such as support services or financial assistance, as well as designated staff trained to identify customers under extreme stress because of family and domestic violence.
CALI chief executive Christine Cupitt explained that contacting life insurance companies can often be difficult for people, however, this is further compounded for those who have suffered domestic or financial abuse.
“Financial and risk advisers are often the first point of contact for their clients when things go wrong,” Cupitt said.
“This best practice guidance will give financial and risk advisers confidence that, when a vulnerable client speaks with their life insurer, they will be cared for by a human being who is respectful, compassionate and empowered to assist them in their time of need.”
Informed by the lived experiences of victim-survivors and developed in consultation with social enterprise Flequity Ventures and the Independent Collective of Survivors, CALI said the guidance will help Australian life insurers support victim-survivors with “safe and secure practices when they need it most”.
Flequity Ventures director Catherine Fitzpatrick added: “This is the first finance sector guidance to incorporate financial safety by design and commit to considering financial abuse in product design.
“The recommended changes will prevent perpetrators from weaponising life insurance as a tactic of coercive control and provide additional protection and support to victim-survivors.”
Speaking with ifa last year, Fitzpatrick explained that while advisers are not social workers or specialists in domestic abuse, “They can recognise the signs, respond with empathy, and invite the client to speak privately.”
This follows the parliamentary joint committee (PJC) on financial abuse calling for improvements in the financial abuse training for advisers late last year, signalling the important role of financial abuse in combating financial abuse.
“These professions play a crucial role as front-line service providers and often have a holistic and detailed knowledge of individuals’ financial situations beyond the knowledge of individual institutions, such as banks and insurance and superannuation providers,” the PJC said in December.
Subsequently, in a submission to the Attorney-General’s department earlier this week, the Financial Advice Association Australia (FAAA) noted the role of the financial advice profession in addressing the abuse and mistreatment of older people, particularly as they help clients manage issues of inheritance and aged care housing.
“The FAAA is committed to doing everything that we can to play a role in addressing this issue. We stand willing to work with government, other associations and financial institutions to act upon the National Plan,” the submission said.
