ASIC is turning up the heat on the life insurance industry, saying too many companies are falling short of the required standards for advising on or selling disability products.

A sampling of life companies and agents from each state and territory turned up companies failing to meet the standards set by the Life Insurance Code of Practice. A relatively large number of consumer complaints over disability products were also noted, with ASIC saying the complaints have increased steadily over the past five years.

Disability insurers receive about $750 million in premiums each year. But it’s a complex product and appropriate advice is vital, according to ASIC National Director of Financial Services Regulation, Ian Johnston.

“Given that the Life Code has been in operation for almost five years, we would expect there to be a substantial level of industry compliance,” he said.

But agents’ records on the sale of disability products were inadequate and many of the agents interviewed by ASIC were not able to express clearly their obligations to clients.

Now ASIC is demanding the life companies involved conduct immediate compliance reviews and report back on action taken. Reviews of their internal compliance arrangements have also been requested.