An independent expert report into FSC member insurers’ compliance with the life insurance code of practice has found that a number of insurers “appear not to be taking their obligations seriously”.
The Life Insurance Code Compliance Committee's report into insurers' compliance with the code over the 2019 financial year found that the corporate culture of "many" insurers appeared not to align with the code.
"The effectiveness of [code] subscribers’ staff training programs and monitoring frameworks is questionable, as evidenced by the large volume of breaches caused by human error," the committee said.
The report also pointed to the fact that insurers lacked sufficient processes for reporting breaches of the code relating to claims decisions time frames, and that claims-related complaints and claims handling time frames had increased.
Committee chair Anne Brown specifically called out the poor data provided by insurers in remarks released alongside the report, saying this had made the information gathering process extremely difficult for the committee.
"The committee’s intention was to publish a report that would provide meaningful insights into how subscribers have improved their code compliance since the code came into formal operation in 2017. Unfortunately, inconsistencies in the content and quality of last year’s data and its collation has not enabled this to happen," Ms Brown said.
“Self-regulation is a privilege. With that privilege comes an obligation to ensure that appropriate mechanisms are in place to comply with the code and report, via complete and accurate quantitative data, both internally and externally."
FSC chief executive Sally Loane sought to downplay the findings of the report, saying insurers had already taken steps to improve and that the code was still in its early days.
"The 2018-19 report reflects results from the code’s second year in existence and we are confident the industry is undertaking determined steps to improve the way it delivers services to customers," Ms Loane said.
“We note examples where industry has improved markedly in the past 12 months, including investing $600 million in new systems, including claims management systems that have code monitoring and reporting embedded in them."
The prudential watchdog has signalled funds should brace themselves for high vo...
The “tourism mecca” may be no more as IPO Wealth has had liquidators appoint...
Almost half a million Australians have completely emptied their superannuation s...