Life insurers improve code compliance

The committee’s annual report for 2020 revealed 127 breach allegations had been received against life insurers over the course of the 2019-20 financial year, with 102 assessed over the course of the year and 65 determined as actual code breaches.

The committee said the majority of these breaches concerned life insurers’ complaints handling and claims obligations.

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The report noted a 36 per cent drop in code breach allegations over the 2020 financial year compared with 2019.

Life insurers also self-reported 44 code breaches over the year, with 33 of these being assessed by the committee as significant breaches. Just over half of these concerned claims handling while the rest related to compliance systems adequacy and policy changes, the committee said.

The committee also published 40 de-identified determinations following investigations of code breaches by insurers during the 12 months to June.

Committee chair Anne Brown said while it was pleasing that code breach allegations had dropped over the course of the year, the number of breaches reported by insurers themselves was still too low.

“Disappointingly, we continue to see subscribers report low numbers of significant breaches,” Ms Brown said.

“The committee believes that not all significant breaches are being reported. We urge subscribers to regularly review their compliance monitoring frameworks to gain assurance of their effectiveness, but also to encourage and support staff at all levels of the organisation to identify and report significant breaches.”

In its report, the committee flagged it would conduct a number of inquiries over the 2020-21 year around specific compliance issues for insurers, including the obligation to report changes in medical definitions to policyholders.