The Life Insurance Code Compliance Committee report, released late last month, revealed that the 20 insurers who subscribe to the FSC Life Insurance Code of Practice received almost 10,000 complaints about retail insurance over the course of the 2019 year.
This represented around 49 per cent of total complaints received by insurers over the year, and was 40 per cent higher than the number of retail insurance complaints received the previous year.
At the same time, direct insurance also recorded a 21 per cent increase in complaints, with complaint numbers totalling over 7,000. Complaints about direct products represented 37 per cent of total complaints received during the year.
Complaints overall about life insurance increased by 29 per cent during the 2019 year.
The report also revealed worsening claims processing time across the board for life insurers, with 17 per cent of income-related claims not being processed in the time frames required in the code, compared to 11 per cent in 2018.
Non-income related claims times also deteriorated slightly, with 9 per cent not being processed in the required time frame versus 8 per cent in 2018.
Under the code, insurers are able to take up to 12 months in processing a claim if unexpected circumstances apply, rather than the two-month and six-month time frames that apply to income and non-income-related claims respectively.
However, the report found only 32 per cent of claims that were taking longer than the required time frames had been classed as having unexpected circumstances applying.
In these cases the undetermined claims would count as a breach of the code, however the committee noted there were significantly less breaches being reported than the number of claims that were undetermined and did not have special circumstances applying to them.
Of the code breaches that were reported by insurers, almost 74,000 consumers were affected by these over the course of the 2019 year.
The headline should be changed to ‘Advisers sticking up for their clients amid deteriorating claims handling by life insurance companies’. That has certainly been my experience lately and the numbers in this article appear to support it
Oh Sally Loane the industry is calling you. From Glen to Glen to answer for yourself
Why is the code a failure and not enforced? Why has your LIF failed and ruined the industry. Stop hiding and provide some answers
https://www.ifa.com.au/risk/28157-underinsurance-soars-as-premium-hikes-lif-bite
How am I not suprised! Customer Service life company staff use no discretion when it comes to problem solving with client issues. They’ll use the line ÿour welcome to lodge a complaint” approach and leave someone else in the IDR to resolve the issue. Bugger that, I’ve escalated the issue to senior management unrelated to the Customer Service Dept and have had issues resolved in a matter of hours! Quite frankly, they’re a waste of time in having issues dealt with!
I’m not even sure now why I wasted my time reading. I think it is because I like to see other Adviser’s comments particularly now that most Dealer Group’s are hell bent on keeping Advisers separated so we can’t combine with one voice.
I don’t believe anything that is associated with the FSC
This is a cheeky piece. Truth be told, FSC members sowed the seeds for this outcome when they started an unnecessary conflict with their distribution base.
Advisers are shedding clients, Advisers are leaving the industry and clients are shedding advisers thanks to RC driven perceived and/or real value for $ concerns.
The end result is clients without adviser advocates will nearly always end up in conflict at time of claim. This mirrors the complaints in direct and super insurance.
Its so tedious slow clapping the FSC, ASIC, Frydenberg, “Consumer” groups, FPA and AFA (so late to the party all the beer and the guests were gone)…