The Life Insurance Code Compliance Committee (Life CCC) has sanctioned a life insurer for failures in claims handling that led to significant delays for customers waiting on decisions.
The insurer did not request information from claimants at the earliest available opportunities, as required by the Life Insurance Code of Practice.
The failures occurred between July 2023 and May 2025 and resulted in 358 breaches of the Code. Some customers experienced delays of more than eight months on their claims, with the insurer later paying a combined total of $160,000 in interest to 101 eligible customers affected.
Chair of the Life CCC, 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,” Ms McClelland said.
“When an insurer does not ask for the information it needs as early as possible, claims can stall and customers can be left facing unnecessary stress, uncertainty and financial pressure.”
The Life CCC found the failures were linked to staffing shortfalls, capability gaps, outdated claims practices, and insufficient monitoring and oversight.
Ms McClelland said the case showed why insurers needed effective systems to support timely and fair claims handling.
“Good claims handling depends on effective controls working as intended,” Ms McClelland said.
“It is important that insurers maintain strong oversight and respond promptly when they see issues emerge.”
As the sanction, the Life CCC issued the insurer with a formal warning and required it to undertake an independent audit of its compliance with the Code of Practice.
The audit will examine the insurer’s processes for requesting information from claimants, the effectiveness of its corrective actions, and its oversight and monitoring arrangements.
Ms McClelland said the sanction reinforced the importance of identifying and addressing compliance issues early.
“When problems emerge, insurers need to act quickly to understand what has gone wrong, fix it, and prevent it from happening again,” Ms 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 case also highlights that people making life insurance claims should expect their insurer to ask for the information it needs as early as possible and to handle their claim without avoidable delay.
The Life Insurance Code Compliance Committee continues to monitor industry compliance and expects insurers to take proactive steps to identify emerging issues, address delays promptly and prevent customer detriment.
About us:
The Life CCC is an independent body established to monitor compliance with the Life Insurance Code of Practice. Its purpose is to ensure consistent and high-quality service standards are maintained for the benefit of consumers. This also works towards increasing trust and confidence in the life insurance industry.
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