The number of self-reported breaches of the Life Insurance Code of Practice has nearly doubled from last year, but limited resources are restricting the ability to investigate them properly.

The Life Code Compliance Committee’s annual report says there were 43 self-reported breaches of the code, compared to 23 last year. They mostly involved claims processing (nine), policy changes and cancellations (seven), buying insurance, and sales and advertising (four).

But the breaches also highlighted deficiencies in compliance systems and processes. The committee issued its first notice of sanction during the year and published 17 decisions following an investigation.

The committee says resource constraints – which it has previously noted – are affecting its ability to work through the breaches. Five of the 43 self-reported breaches amounted to a breach, and four didn’t. But the committee was still assessing 34 breaches at the end of the reporting period.

The report also reveals that some insurers are not implementing processes and procedures to ensure compliance with the code. Thirteen out of 14 self-reported breaches concerning monitoring and enforcement related to the code section dealing with compliance. Ten of the breaches came from one insurer.

“In the committee’s view, a significant breach of the code will often indicate that the subscriber did not have appropriate processes and procedures in place to enable compliance with the code”.

The committee also received 198 reported code breach allegations. After excluding a bulk referral from a class action in the previous financial year, the number of both referred and self-reported breaches were higher in the 2018/19 financial year.

Just over 100 of the alleged code breaches came from lawyers representing clients.

Some 106 breaches related to claims, a 147% increase compared to the previous year. Most related to the timeframe around advising clients of the status of their claim.

The root causes of the breaches were broadly similar to the previous year, the committee says. It put the higher figures down to increased awareness of the code and obligations and rights to report breaches.

But the committee raised concerns that “subscribers are not adequately reporting all significant breaches of the code”.

“Self-reporting is an ongoing obligation, and subscribers must ensure they have robust internal frameworks in place for identifying and reporting Code breaches,” the report says.

The code relies on subscribers to determine if breaches are significant, and the committee is urging the Financial Services Council to grant it the power to determine what constitutes a significant breach.

Allowing subscribers to determine what constitutes a significant breach is inconsistent with other codes, it says.