The consultation period for the Life Insurance Code of Practice draft will close on 9 September, after the Financial Services Council (FSC) released the code in August after delays.
The code of practice covered life insurance policies such as term life insurance/death and terminal illness, total and permanent disability (TPD), trauma cover/critical illness, disability insurance, and funeral insurance.
It also included income protection/salary continuance, business expense cover, and consumer credit insurance issued by a life insurer.
It does not cover annuities and investment life products, except components considered as a life insurance policy, whole-of-life endowment insurance products, insurance products issued by general insurers, health insurance products from health insurers, and other products that could be issued by someone who was not registered as a life insurance company with the Australian Prudential Regulation Authority under the Life Insurance Act 1995.
The code of practice document also said financial advisers may not be covered by the code, and advisers who recommend life insurance policies may have obligations under financial services laws and their own industry codes of conduct.
“Where your financial adviser is an entity that holds an Australian financial services licence that recommends or distributes our life insurance policies, it is not acting on our behalf, and is only bound by the code if it adopts it under section 2.1(b),” the document said.
A member of the FSC that was a registered life insurance company issuing life insurance policies was bound by the code, as were others, including non-FSC members, who adopted the code through a formal agreement with the FSC and the Life Code Compliance Committee (CCC).
“For clarity, superannuation fund trustees who are members of the FSC are not bound by the Code unless they enter into a formal agreement with the FSC and the Life CCC under section 2.1(b),” the report said.
The Code would begin on 1 October, with a transition period until 30 June 2017. Those who transition to the Code must notify the FSC, the document said.
