The new Life Insurance Code of Practice comes into force at the start of this month, introducing more than 50 new consumer protection measures including a financial penalty of up to $100,000 for significant breaches and an extension of the moratorium on genetic testing. 

“These protections encompass product design, sales practices, and claim processes,” Financial Services Council (FSC) CEO Blake Briggs said. 

“Notably, the new Life code includes vital safeguards for customers during periods of vulnerability, financial hardship, or when experiencing mental health conditions.” 

The FSC has also introduced an enforceable standard in relation to claims handling for superannuation funds and it commences on July 1. 

The peak body says the standard is mandatory for all FSC superannuation members to complement the protections in the new life code. 

“The standard includes consumer-focused commitments for trustees to help their members navigate through the claims process,” the FSC said. 

These include including making a claim on insurance, overseeing the timeframes for claims assessment, reviewing the life insurer’s decision and ensuring accepted claims are paid promptly to the member. 

Life insurers have welcomed the new code, its first revamp since the FSC introduced it in 2016. 

“Australian life insurers have listened to the needs of their customers and the community by developing an updated Life Code that sets a higher bar for the industry,” Council of Australian Life Insurers (CALI) CEO Christine Cupitt said. 

CALI’s 19 members are signatories to the code. The peak body says it is working with the FSC to transition governance of the code to CALI by September 30. 

Zurich Australia and New Zealand CEO Justin Delaney says the new code represents a “significant milestone” for Australian life insurers. 

“At Zurich, we take acting in the best interests of our customers seriously and we support maintaining an industry-wide approach that holds all insurers to a high standard,” he said. 

“The new code will impact all facets of our customer interactions, from how products are designed, to how they are sold, through to the claims experience.”