Working to ensure a smooth transition to the new Code of Practice
The Life Insurance Code Compliance Committee (Life CCC) prioritised supporting a smooth transition to the new Code of Practice in 2022-23, according to its Annual Report.
The Annual Report 2022-23, published today, noted how the work of the Life CCC helped life insurers to proceed with clarity in aligning systems, processes and practices to new obligations in the Code.
The new obligations and additional consumer protections came into effect on 1 July 2023.
Jan McClelland AM, Chair of the Life CCC, spoke of the importance of providing such support to life insurers.
“I am confident that we have done all we can to provide support and guidance on the new Code. This allowed life insurers to focus on improving their practices and meeting the new obligations without any uncertainty,” Ms McClelland said.
“It is often uncertainty about obligations – questions of interpretation, practical application – that leads to more breaches and poorer outcomes for customers. But we provided a clear understanding of expectations for insurers and, by extension, a clear understanding of expectations for customers.”
The Annual Report also highlights the Life CCC’s significant work on investigations in 2022-23. The Life CCC reviewed 236 possible breaches of the Code and confirmed 79 breaches, including 35 significant breaches.
Ms McClelland praised the efforts, emphasising the importance of investigations on Code compliance.
“We got through an impressive number of investigations in 2022-23. Our investigations are vital for uncovering serious or systemic issues. They are a fundamental element in driving improved practices,” Ms McClelland said.
The Annual Report also noted the Life CCC’s new Benchmark Reports, which provide insurers with crucial insights into compliance with the Code.
Each shows a life insurer its compliance with the Code in an industry-wide context, which can help it target areas for improvements.
“Providing insurers with reports that allow them to measure their compliance against industry benchmarks was a major development in 2022-23,” Ms McClelland said.
“These reports were received well, prompting insurers to look at their performances and consider the areas in which they may need to improve systems or processes.”
The Life CCC’s success in encouraging better reporting practices among life insurers also featured in the Annual Report.
It noted that following the Life CCC’s efforts, more insurers reported significant breaches in 2022-23, reflecting a commitment to transparent reporting as an essential aspect of genuine compliance with the Code of Practice.
While the Life CCC does not celebrate breaches, it acknowledges the importance of insurers identifying and reporting them promptly.
Jan McClelland emphasised this point and expressed an ongoing desire to see accurate reporting of genuine compliance with the Code.
“It is pleasing to see that our message about proper accurate reporting is getting through. More subscribers reporting breaches suggests that the code and reporting obligations are being taken seriously,” Ms McClelland said.
“We encourage a genuine reduction in breaches based on improvements to processes, systems and procedures. And this begins with accurate and transparent reporting of breaches.”
The Annual Report is available on the Life CCC website.