The Financial Services Council (FSC) has added two consumer groups to its discussions on the life insurance code of practice.

CEO Sally Loane says the Financial Rights Legal Centre and the Consumer Action Law Centre will be part of the drafting process.

“The consumer representatives will work closely with our members to identify where we need to strengthen consumer protections in our code,” she said. “We are developing this code to show how serious we are about improving our industry for the benefit of customers and consumers. We want to rebuild trust.”

The FSC has been consulting with peak industry bodies, advisers, and legal aid and plaintiff lawyers since December.

But the process has been criticised by ClearView, which claims it is too short, coming before a July 1 implementation date.

“The code contains binding obligations that life insurers owe to consumers,” Ms Loane said.

“The objectives of the code are to commit insurers to high standards of customer service and to improve trust and confidence in the industry.”

It will be mandatory for FSC life insurance members to comply with the code.

There will be an independent governance framework, with compliance monitored by an independent committee of experts, including a consumer representative.

“This independent committee will sit outside the FSC,” Ms Loane said. “This is the process other financial services use to great success, because it ensures effective and transparent compliance.”

She says the FSC “won’t rush” development of the code, but accepts there is pressure to deliver before the deadline. “The code has always been an important part of our commitment as an industry to strengthen community trust and confidence in life insurance.”