The Financial Services Council (FSC) has called for a seven-year time limit on disability claims under group insurance.

CEO John Brogden says the change is required to make the life insurance industry sustainable.

“The FSC will seek amendments to legislation to introduce a seven-year limitation on group insurance disability claims,” he told the council’s life conference in Sydney last week.

“This aligns with the time limit for maintaining medical records. We believe this is eminently reasonable.”

Mr Brogden says the move will help the group life industry manage pricing.

The FSC also wants changes to the Private Health Insurance Act allowing insurers to fund medical treatment that helps claimants return to work.

“Research has consistently demonstrated that participation in work provides better health and general welfare outcomes for individuals,” he said. “This will also help insurers work with the medical profession to enable people to return to work.”

Mr Brogden says the change will help insurers halt growing claims costs and cut spurious litigation.

The FSC is also pushing for improved data, particularly in the group market.

“Further action includes considering the benefits of establishing an industry fraud bureau, as seen in the general insurance industry and countries such as Canada and South Korea… [and] also establishing a medical impairment bureau,” Mr Brogden said.