The Australian Securities and Investments Commission (ASIC) has warned life insurers that they must stand by Code of Practice commitments towards vulnerable customers as pressures increase due to the coronavirus pandemic.

Many, if not most, of the sector’s customers are likely to be in a vulnerable position, suffering financial hardship and requiring additional support, Senior Executive Leader – Insurers Emma Curtis says in a letter to life insurance company directors.

“Taking steps to provide that additional support, as committed to in the key code promises, will be crucial during this time,” she says.

ASIC has warned insurers should consider, where appropriate, going beyond the hardship provisions of the code and reviewing options for premium holidays or deferrals.

Insurers should also take account of changed personal and working circumstances in claims handling, such as situations that could impact income protection or total and permanent disability claim outcomes.

Ms Curtis says in addition there will be a range of insurance related issues that arise due to the effects of the pandemic on superannuation fund balances.

“We encourage insurers to work proactively with superannuation trustees to arrive at fair outcomes for members making insurance claims,” she says.

ASIC also warns that it will be collecting data after the immediate impact of the pandemic subsides, on claims connected to the outbreak and will be engaging shortly with the Financial Services Council and insurers on likely requirements.

The regulator sent similar letters last week to general insurance company directors.