The Life Code Compliance Committee (the Committee) – the independent Committee which monitors and enforces industry compliance with the customer service standards set out in the Life Insurance Code of Practice (the Code) – today released its Annual Report for 2018-19.
The Annual Report outlines another busy year for the Committee in the context of the evolving industry environment and challenging scrutiny from both regulators and the Royal Commission1. Despite resourcing constraints during its second year of operation, the Committee:
- Completed its inaugural Annual Data Compliance Program, culminating in the release of the Annual Industry Data and Compliance Report (Data Report) in March 2019.
- Launched a programme of high-level meetings between the Committee and Code subscribers’ boards and executive teams, giving both parties an opportunity to discuss relevant industry and compliance matters, current Code monitoring activities and the evolution of the
- Published 17 Determinations2 and issued the Committee’s first Notice of Sanction to a Code
- Formally responded to initial consultation by the Financial Services Council (FSC) on draft v2.0 of the Code
During 2018-19, Code subscribers self-reported 43 breaches of the Code, compared to 23 last year. The 43 mainly concerned policy changes and cancellation rights, claims processing and buying insurance, whilst often also highlighting underlying deficiencies in compliance systems and processes.
In addition, the Committee received 198 Code breach allegations, predominantly focussed on non-timely processing of claims and complaints.
Root causes of both self-reports and referrals were broadly similar to 2017-18. However, excluding a large 2017-18 bulk referral3, total numbers of individual referrals and self-reports were higher in this second year of Code operation than in 2017-18, but this was not unexpected, since subscribers, members of the public, their legal representatives and consumer representative groups are becoming more familiar with the Code and their obligations and rights to report an alleged breach of the Code.
The Committee actively worked with subscribers to rectify Code breaches and implement remedial action, including compliance framework enhancements, to improve outcomes for their customers. The Committee also enhanced its internal processes to achieve more efficient and effective outcomes.
Committee Chair Anne Brown said:
“In a challenging year, the Committee worked hard to achieve its key deliverables. Pleasing stakeholder reception of our inaugural Data Report and fruitful results from our subscriber Board engagement programme indicate industry confidence in the activities and outputs of the Committee.”
“We will continue to focus on robust and efficient monitoring and enforcement of the Code, to deliver assurance to the community that subscribers are being held to account in meeting their Code obligations. Our ongoing provision of practical guidance and examples to subscribers on how to comply with the Code is driving improved and more consistent outcomes for the public.”
“As a key stakeholder, we will also continue to contribute to the Code review project. We encourage the FSC 4 and industry to maintain momentum on this important project, to fulfil post-Royal Commission regulatory and community expectations.”