Total breaches of Code obligations have increased for a third consecutive year according to the latest report released by the Life Code Compliance Committee (Life CCC).
Despite the total breaches rising by 9%, the Annual Industry Data and Compliance Report found that the number of customers impacted by breaches declined between 1 July 2022 and 30 June 2023.
Chair of the Life CCC, Jan McClelland AM, expressed cautious optimism about the findings.
“It is encouraging to see a decrease in the number of customers impacted by breaches for the second year in a row. This indicates we are making headway in delivering better outcomes for consumers,” Ms McClelland said.
“Unfortunately, this positive trend is offset by an overall increase in breaches for the 2022-23 period. This marks the third consecutive year of rising breaches, signalling that there is still much work to be done.”
The report also called out the prevalence of breaches related to claims handling obligations, which rose by 18%.
“Failing to address claims promptly not only breaches Code obligations but also adds unnecessary stress for customers, undermining trust in the industry. Life insurers must prioritise meeting claims handling and communication time-frames to improve customer satisfaction and meet community expectations,” Ms McClelland said.
The potential under-reporting of breaches and complaints by some life insurers was another area of concern for the Life CCC. Under-reporting limits a life insurer’s ability to address issues effectively and improve operations.
Ms McClelland urged all life insurers to review their processes for detecting, recording, and reporting breaches to ensure transparency and accountability.
Complaints against life insurers have also surged. The report noted a link between claims handling breaches leading to an increase in complaints and reiterated the importance of meeting claims handling obligations to reduce customer frustration and operational inefficiencies.
“We expect life insurers to take proactive steps to improve compliance and safeguard consumer trust,” Ms McClelland said.
Read the Annual Data and Compliance Report.
About us:
The Life Code Compliance Committee’s purpose is to monitor compliance with the Life Insurance Code of Practice to improve service standards in the Australian life insurance industry.
Contact details:
media@codecompliance.org.au