Life insurers still falling short on their own code
Some life insurers are still falling short of the expectations with respect to meeting their obligations to the Life Insurance Code of Practice, according to the latest Life Code Compliance Committee report released this month.
The report found that a number of life insurers appeared “not to be taking their obligations under the code seriously”.
In fact, the situation is so bad in some instances that the Committee found itself unable to publish what it described as meaningful insights into how life insurers had improved their compliance with the code.
“The Committee’s intention was to publish a Report that would provide meaningful insights into how subscribers have improved their Code compliance since the Code came into formal operation in 2017,” the committee chair, Anne Brown said. “Unfortunately, inconsistencies in the content and quality of last year’s data and its collation has not enabled this to happen.”
The Committee was able to determine a number of key findings through the Report, including:
- The Code’s smaller subscribers generally provided high-quality data but larger subscribers need to improve their data quality assurance and reporting.
- Although recent improvements have been noted, the corporate culture of many subscribers appears not to align with the standards set out in the Code.
- The effectiveness of subscribers’ staff training programmes and monitoring frameworks is questionable, as evidenced by the large volume of breaches caused by human error.
- The under-reporting of breaches relating to claims decision timeframes indicates that subscribers lack sufficient processes for recording and reporting such breaches.
- Increases in claims-related complaints and claims handling timeframes show that subscribers need to improve their claims management processes.
Commenting on the release of the code, Financial Services Council chief executive, Sally Loane, noted examples of where the industry had improved markedly over the past 12 months, including investment in new systems, including management systems that had code monitoring and reporting embedded in them.
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