An investigation by the Life Code Compliance Committee (LCCC) – sparked by claims from Maurice Blackburn – found over 700 breaches of the insurers code in a six-month period in 2017.
“[The report] suggests that despite all rhetoric and promises to do better before and after the Hayne royal commission, many insurers have treated their own code as a paper tiger and this casts doubt on the industry’s ability to rebuild public trust,” said Maurice Blackburn principal Josh Mennen.
“These hundreds of confirmed breaches are merely the tip of the iceberg because, no doubt, many more have gone undiscovered since I lodged this complaint with the LCCC two years ago.”
The LCCC also criticised insurers for failing to respond and co-operate with the LCCC in a timely manner.
But the Financial Services Council (FSC) has hit back at the claim, saying the report is “silent on the positive changes made by the life insurance sector”.
“Most allegations (598) were regarding the timing of claims decisions,” the FSC wrote in a release.
“After investigating the 598 allegations, more than half were found not to be breaches, and almost one in eight (13 per cent) of these allegations were ‘unfounded’.”
The 103 remaining allegations were about the timing of complaint outcomes, of which two-thirds were found not to be breaches. Over 7.5 per cent were “unfounded”.
“This report is also silent on the LCCC’s own findings from their latest compliance report, which shows in the year to 30 June 2018, life insurers assessed 131, 271 claims,” the FSC wrote.
“Of these, 89 per cent of income related claims and 92 per cent of non-income related claims were within the required code time frames … Both the royal commission and the Australian Securities and Investments Commission have acknowledged that the Life Insurance Code of Practice has resulted in improvements.”
The FSC state the report is “silent on the positive changes made by the life insurance sector”.
What positive changes??
The FSC has created a code that when breached has no repercussions. Have the FSC imposed any sanctions for breaches? No
The corrupt way the FSC pushed through the LIF has created:
1. Unprecedented increases in premiums to existing customers and higher than ever lapses.
2. Discounting by its members for new business who are actively trying to encourage churn for the same products they say premiums have to increase for because of claims.
3. An unprecedented fall in new business coupled with higher lapses meaning that they (the FSC) have created a higher under-insurance gap.
4. Worsening of products.
If Maurice Blackburn are reading this I would suggest they look at the corrupt way the FSC hid the correct lapse data from ASIC in order to push through the LIF, This was openly admitted by ASIC that they got it wrong (after the LIF was passed and the FSC members were forced to provide the correct lapse data).
I would then suggest they look at the effect above that the FSC’s actions in creating the LIF have had on consumers and I would suggest they launch a class action against the FSC.
I’m sure the FSC have PI cover?
I cannot believe that these life companies think its a good business strategy to offer discounts for new business whilst increasing the prices of in force business. Why dont they just try to protect what they have and support their customers and the advisers who recommended that product.
But soon there wont be any Insurance Advisers left and the cost to change policies will be too high (due to the removal of commissions) so customers will be stuck paying for expensive insurances as who (other the HNW clients) will pay $2,000 for the insurance SOA which is required when switching insurers.
You’re going cheap at $2000 per soa. More like $4000
Spot on
Almost like the ABC. Report the bits you like and call it news.
Typical bottom feeding lawyers, ifr ever there was a need for a RC it is into this toxic Industry itself.