Life Insurance Code of Practice breaches in the last financial year fell 29% to 171, including 44 that were reported by subscribers as significant.

The Life Code Compliance Committee has cautioned in its annual report against drawing “particular conclusions” about the decline, citing the “relative newness” of the code since it was introduced only on July 1 2017.

However, the committee is concerned about the number of reported significant breaches, which increased by one from 43 in the 2018/19 year.

It reviewed 34 of the self-reported significant breaches and confirmed 33 of the cases met the criteria as set out in the code.

The committee says it remains of the view that subscribers are under-reporting significant breaches, partly because of the comparatively high number of breach allegation referrals during the period.

There were 127 alleged breaches including 74 from third-party advocates such as consumer representatives. The committee, which has the discretion to investigate referrals, found 65 of the 102 cases it investigated did not meet the code.

“We urge subscribers to regularly review their compliance monitoring frameworks to gain assurance of their effectiveness, but also to encourage and support staff at all levels of the organisation to identify and report significant breaches,” Life Code Compliance Committee Chairman Anne Brown said.

While subscribers are required to report significant breaches to the committee within 10 days of identifying the breach, it is for them to determine if a case is “significant” using the definition outlined in the code.

“The code has now been in operation for three years and the committee expects subscribers to have developed robust code compliance frameworks in place to identify, capture and manage all breaches, and to assess and report those that are determined to be significant breaches as soon as they occur,” the annual report says.

“Even if there is doubt about whether a breach is significant or not, subscribers should err on the side of caution and report it.”

The annual report is based on inputs from 25 code subscribers during the period. Claims handling accounted for 52% of self-reported significant breaches and 61% of alleged breaches.

The number of self-reported significant breaches related to claims handling rose to 23 from nine in 2018/19.

The committee says the increase suggests “an improved understanding by subscribers of their claims-handling obligations under the code and their breach monitoring processes in this area.”

To access the report, click here.