Un-named life insurer sanctioned by LCCC

The insurer did not request information from claimants at the earliest available opportunities (as required by the Life Insurance Code of Practice), and this triggered the sanction being handed down on 10 March 2026.  

According to the LCCC, the sanction involved a formal warning and requirement that the insurer undertake an independent audit of its compliance with the code.  

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The audit will include an examination of the insurer’s processes for requesting information from claimant, the effectiveness of any corrective actions, and its oversight and monitoring arrangements.  

“This de-identified case study is intended to promote industry learning, strengthen understanding of our expectations and support continuous improvement across the sector,” the LCCC said.  

The failures occurred between July 2023 and May 2025, resulting in 358 breaches of the code, with some customers experiencing delays upwards of eight months for claims. The insurer later paid a combined total of $160,000 in interest to 101 eligible customers affected.  

The most significant delays ranged from 91-180 business days, affecting 53 customers, with an additional seven having to wait even longer.  

For its part, the life insurer has implemented a series of corrections, including:  

• Refresher training for all claims and underwriting staff, alongside enhanced induction processes for new employees. 

• New processes aimed at enabling earlier intervention, including measures to encourage more timely and consolidated information requests. 

• Improved reporting and oversight, featuring enhanced compliance dashboards and additional breach reporting to support management monitoring. 

• Strengthened quality assurance and governance frameworks, including independent reviews, targeted staff development initiatives and formalised breach assessment criteria. 

“We expect insurers to maintain effective systems, strong governance and appropriate capability management to comply with Code commitments,” LCCC said.  

“This includes ensuring staff are well trained, have the right skills and knowledge, and are properly supported and supervised through clear, timely and consistent processes.”  

Chair of the LCCC, Jan McClelland AM, said delays in claims handling could have serious consequences for people already experiencing difficult circumstances. 

“People make life insurance claims at some of the hardest moments in their lives,” she said.  

She added: “Good claims handling depends on effective controls working as intended.”  

“It is important that insurers maintain strong oversight and respond promptly when they see issues emerge.” 

LCCC also highlighted that the case should reinforce that people making claims should expect their insurer to ask for information its needs at the earliest opportunity and to handle their claim without avoidable delay.  

“When problems emerge, insurers need to act quickly to understand what has gone wrong, fix it, and prevent it from happening again,” McClelland said.  

“Life insurers must have the systems, governance and capability to meet their Code commitments in practice. Customers are entitled to have their claims handled fairly, clearly and without avoidable delay.” 

The committee concluded that it will continue monitoring the industry and expects insurers to take proactive steps to identify emerging issues, address delays promptly and prevent customer detriment.