Insurance
Life insurers are doing their best: FSC

The Financial Services Council has responded to a largely damning report from the Life Code Compliance Committee, arguing it is silent on positive changes the industry has made.

The report looked at cases dating back to June 2017 and found that timeframes for claim processing as outlined in the Life Insurance Code of Practice were not met.

The review of 11 subscribers to the code's compliance came about after the LCCC received more than 700 alleged breaches of the code from law firm Maurice Blackburn.

"The report is silent on the positive changes made by the life insurance sector," the FSC said in a statement.

It noted that the LCCC's criticisms in the report relate only to the timing of decisions, not the outcomes.

The FSC said 598 of the approximately 700 allegations of code breaches related to the timing of claims decisions.

Of those, 13% were found to be unfounded.

"This report is also silent on the LCCC's own findings from their latest compliance report, which shows in the year to 30 June 2018, life insurers assessed 131, 271 claims," the FSC said.

"Of these, 89% of income related claims and 92% of non-income related claims were within the required Code timeframes."

The FSC also noted that both the Royal Commission and recent work from ASIC acknowledged that the Life Insurance Code of Practice had resulted in improvements in the industry.

"In addition, FSC/KPMG data shows that life insurers decide the overwhelming majority of claims in favour of customers: 92% of all claims assessed are paid in the first instance," the FSC said.

Read more: Life Code Compliance CommitteeFinancial Services CouncilLife Insurance Code of PracticeMaurice Blackburn
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