The review was commenced in December of last year after the Council of Australian Life Insurers (CALI) took responsibility of the code from the Financial Services Council in 2023.
The final report is the conclusion of consultation across the life and risk sectors, including industry bodies, consumer representatives, regulators and government agencies, medical experts, legal practitioners, the Australian Financial Complaints Authority (AFCA) and the Life Code Compliance Committee (LCCC).
The final report contains 85 recommendations, including:
- Industry commitments and communication on mental health cover and support;
- Support for customers experiencing vulnerability;
- Engaging with First Nations customers;
- Claims handling, including timeframes and communication during claims; and
- The provisions for compliance and enforceability for the Code.
“The industry’s approach to mental health has been an area of particular focus, in light of the challenges to sustainability as claims have increased,” Kell said.
“There is an additional set of recommendations on mental health cover, and the Reviewer is proposing that the industry undertakes further engagement with stakeholders to ensure fair and transparent outcomes for consumers.”
CALI has said the life insurance industry welcomes the final report, with chief executive Christine Cupitt thanking Kell for his findings and work.
“The Life Code is central to continued trust between life insurers and the Australians they protect, and we thank Peter Kell for the expertise, independence, and engagement he has brought to this review,” Cupitt said.
“Many people and organisations have contributed their time, insights, and expertise to the review. We will continue to engage with them as the industry now carefully considers the final report and its 85 recommendations.
“Our focus will be to ensure any changes to the Life Code strengthen customer protections and are designed and implemented in a way that supports the long-term affordability and accessibility of life insurance for Australians.”
Kell too thanked the industry for its contribution: “The extent of interest and detailed input into the review from a wide range of stakeholders indicates the significance that stakeholders place on the Life Code. It is seen as a key initiative from the life insurance industry to build trust and confidence, but there are clear expectations that the Code should continue to improve to meet evolving customer and community standards.”
However, other professional organisations such as the FAAA have expressed frustration toward the process and some interim findings.
At the release of the interim report in May, the FAAA said it felt as if their concerns had not been addressed.
The association argued its key concerns around broad mental health exclusions, ongoing premium increases and upfront premium discounting had not been adequately addressed, saying the recommendations focused on disclosure rather than tackling the underlying issues.
At the time, the FAAA said: “We do not feel that this is sufficient to address the importance of these issues. The right outcome is to prohibit upfront premium discounting. Disclosing the implications of the cessation of any discount will do nothing to remove this nonsensical practice.”
Seriously these so-called industry leaders have absolutely no idea of the immediate concerns for the Risk Insurance profession. The upfront premium discounting is an issue for longevity of a risk policy, but no thought or discussion about its problems in the advice market, the renewal premium on these discounted premiums are as high as 33% in the second year.
And the profession cannot survive on 60% initial commission. This has not changed since 2018. It needs to increase to a minimum of 80% immediately.
Also, these Law firms who advertise constantly on TPD claims. This needs to be addressed. Seriously some have no idea and are charging a small country’s GDP for an outcome.
Finally….the prohibition of upfront premium discounting which I have been advocating for the last few years.
This serves no purpose other than provide short term incentive, for both the client or adviser, to change insurers which only compounds the impact of claims experience. This is a primary issue which needs to be addressed urgently.
Alas, that is not the recommendation in the report. The report says, basically: make sure the comms to customers are clear.