The Financial Services Council (FSC) has declared a Code of Practice between life insurers and consumers will be implemented in July as it has sought to describe changes to the life/risk sector as a work in progress.
FSC chief executive, Sally Loane on Sunday went to the trouble of issue issuing a formal statement pointing out the important role of the Australian life insurance industry and the fact that it had paid out approximately $5 billion in claims across trauma, total and permanent disability, income protection and life insurance in 2014, taking the total amount paid out in claims in the past eight years to $27 billion.
Her statement came in the face of media reports pointing out problems within the Commonwealth Bank’s insurance arm, Comminsure, which appeared to mostly relate to insurance within superannuation, rather than advised insurance products.
In seeking to put the performance of the life insurance sector in perspective, Loane said: “The entire life insurance sector is currently undergoing significant change and reform which is resulting in increasing protection for consumers. Overwhelmingly, the industry plays a positive role in protecting livelihoods of millions of Australians”.
Her statement also pointed to recent research conducted by KPMG for the FSC showing that, for 2008-2010, there were a total of 630,000 Trauma policies in force across the industry. Over this period heart attack claims made up eight per cent of trauma claims, with 455 industry claims for heart attack from a total of 5,862 Trauma claims.
Loane also pointed to the changes being implemented to the sector via the Life Insurance Framework (LIF) and the consequent development of the Code of Practice.
“The Code, which is still under development, has involved working closely with regulators, consumer advocates and the industry to set standards for selling insurance, claims handling and assisting vulnerable customers,” she said.
