Life Insurance Code of Practice launches with minimum medical definitions

4 July 2017
| By Jassmyn |
image
image
expand image

Financial Services Council (FSC) members are now subject to the industry’s first Life Insurance Code of Practice for consumers, which came into effect from 1 July.

The code covers all aspects of interactions with consumers from product design, buying insurance, regular communications and making claims. It also requires insurers to improve disclosure to customers, provide greater transparency in communications, decide claims within set timeframes, limit the use of surveillance and provide additional support for vulnerable consumers.

Non-compliance with the code would result in sanctions including:

  • Requiring rectification steps within specified timeframes;
  • A formal warning;
  • Requiring a code compliance audit be taken;
  • Requiring corrective advertising or written acknowledgement of a breach to impacted customers; and
  • Publication of non-compliance on the insurance provider’s website and the FSC website.

The FSC said the code had been strengthened ahead of its launch with a foundation of new minimum standard definitions for cancer, heart attack, and stroke for use in trauma/critical illness policies.

The new definitions had been developed with the assistance of medical professionals and their development would be an important foundation in ensuring consumers have confidence in the code.

FSC chief executive, Sally Loane, said: “The FSC has worked closely with our life insurance members and medical professionals to ensure that a new foundation of minimum standard medical definitions is implemented for new policies from day one of the code regime. In doing so we have laid the foundations for the on-going strengthening of the code”.

“As part of the second iteration of the Life Insurance Code of Practice we are committed to considering ASIC [Australian Securities and Investments Commission] registration,” she said.

The FSC also said that its Life Code Compliance Committee (LCCC), the independent body responsible for ensuring member compliance with the code, had been appointed.

The committee will be administered by the Financial Ombudsman Services, and has an industry representative, a consumer representation, and an independent chair.

The members are Professor David Weisbrot (chair), David Goodsall, and Alexandra Kelly. 

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest developments in Super Review! Anytime, Anywhere!

Grant Banner

From my perspective, 40- 50% of people are likely going to be deeply unhappy about how long they actually live. ...

10 months 1 week ago
Kevin Gorman

Super director remuneration ...

10 months 2 weeks ago
Anthony Asher

No doubt true, but most of it is still because over 45’s have been upgrading their houses with 30 year mortgages. Money ...

10 months 2 weeks ago

The profit-to-member super funds are officially operating as a merged entity, set to serve over half a million members. ...

1 day 11 hours ago

Super Review announced 21 winners at the annual Super Fund of the Year Awards, including the recipient of the prestigious Fund of the Year Award....

2 days 2 hours ago

APRA data shows the CFMEU accounted for 28 per cent of super fund industrial contributions, with the shadow treasurer calling for a prompt investigation into the payments...

3 days 6 hours ago