The Life Code Compliance Committee (LCCC), the independent body monitoring life insurers in Australia and enforcing compliance with the Life Insurance Code of Practice, has called for life insurance companies to improve their compliance monitoring.
In its latest annual report, LCCC found gaps in the Australian life insurance industry, including an increase in breaches reported by consumers while subscribers report low numbers of significant breaches.
“This is a trend that has persisted over the last three years and suggests that not all subscribers have adequate breach detection processes. While some insurers are working very well with us and actively looking to enhance performance, others need to improve their monitoring and reporting processes and systems,” said LCCC chair Jan McClelland AM. “This will be particularly important as more than 50 changes to further protect customers are implemented when the new Life Insurance Code of Practice comes into effect in July 2023.”
In 2021-22, the number of allegations of breaches received or identified by the LCCC from consumers and other sources jumped to 191, up from 149 the previous year.
Across the year, the LCCC investigated 216 breach allegations and reviewed 37 significant breaches, many of which had remained open from previous years – bringing the committee closer to its goal of closing all investigations no later than six months after receiving an allegation.
The life insurance industry has less than a year to transition to a new code, which introduces more consumer protections and enables the LCCC to determine significant breaches and sanction non-compliant subscribers.
McClelland encouraged subscribers to review their compliance monitoring frameworks to “ensure they are capturing all significant breaches and have clear and strong processes for transitioning to the new code.”
