Members of the Financial Services Council’s Life Insurance Code of Practice reported 23 breaches of the code in the last financial year, according to the compliance committee’s first annual report.

The committee is responsible for monitoring the code.

Most self-reported breaches concerned non-compliance in legacy products that continue to affect existing customers, according to the report.

Seven of those code breaches regarded policy changes and cancellations, with most concerning the obligation to provide consumers with an annual policy renewal notice.

Five breaches were based on claims and four on sales and advertising.

The committee confirmed 17 of those breaches, while three are still being assessed.

It singles out legacy IT systems as a major cause of concern, saying breaches have happened when insurers have not yet phased out legacy systems that don’t comply with the code.

“Subscribers must continually ensure that legacy products and IT systems are compliant, and crucially must remediate any consumer detriment that occurs while they address non-compliance,” independent chair Anne Brown says.

Two code breaches were identified by the committee’s targeted investigations into compliance in specific areas.

The committee received 747 referrals of alleged code breaches and 785 allegations of individual breaches. Some 711 of those were made in bulk “by an overzealous plaintiff law firm”.

The committee is investigating a sample from the bulk referral, as well as taking measures to examine the potential compliance concerns it alleges, the report says.

More than 650 alleged code breaches related to claims, the vast majority of which concerned the requirement to make a decision on non-income protection claims within six months.

FSC CEO Sally Loane says she looks forward to working with the Financial Ombudsman Service and the code compliance committee as they launch the second version of the code for public consultation by the end of the year.