Plaintiff law firm Maurice Blackburn has told the Royal Commission into Misconduct in Banking, Superannuation and Financial Services that insurance codes of conduct both inside and outside of superannuation need teeth.
Detailing the content of its submission, Maurice Blackburn claimed the life insurance industry’s self-regulated code of practice was failing to protect consumers and warranted serious scrutiny by the Royal Commission.
Maurice Blackburn principal, Josh Mennen said the industry had been given ample opportunities to scrutinise and regulate itself through the code of practice, but it was obvious it was inadequate and failing to hold the troubled industry to account.
“The life insurance code of practice was only implemented on 1 July 2017, but already from our firm alone we have reported over 700 breaches of this code in that short period and we have outlined the insurers who are the main culprits for these breaches – the worst being AIA, CommInsure and TAL - in our submission today,” Mennen said.
“The industry can’t brush off its non-compliance with its own code as it has sought to do by calling the claim assessment time limits ‘aspirational’. It must be held to account to ensure sick and injured insurance claimants are getting fair and reasonable treatment,” he said. “Meanwhile, the voluntary insurance in superannuation code of practice is shaping up to be just as disappointing.’
“It is unenforceable, has no independent administrator and as an extension of the life insurance code of practice, it has inherited all of its flaws. Those super funds who do decide to sign up aren’t required to comply with the code until 2021.’
“That’s why we have asked the Royal Commission to recommend that codes of practice be required to have ASIC approval and enforceability, with robust sanctions for failure to comply,” Mennen said. “We have also asked the Royal Commission to give consideration to ensuring enforceable codes enshrine standard definitions, with clear timeframes for processing claims and setting out remedies and sanctions for code breaches.”