Tuesday 28 September 2021 was an important milestone for the life insurance industry.
It was the day that the Life Code Compliance Committee (LCCC) published its annual report on how the industry met its obligations under the FSC Life Insurance Code of Practice (the Code) in the year to 30 June 2021.
The Code is the industry’s way of promising fair treatment to its customers in all their dealings with the industry, and of raising standards of service across the board. That’s why it’s important that the industry doesn’t just meet its obligations, it needs to be seen to be doing so as well, which is why the role of the LCCC is key. It helps ensure that consumers can take out life cover with confidence knowing that, if they or their loved ones ever need to make a claim, they will be treated fairly, and with empathy, compassion and respect every step of the way.
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25 per cent reduction in significant breaches
Life insurers self-reported 33 significant breaches of the Code during the year – 11 fewer than in the previous year. Of these, 15 concerned claims handling and a further 12 concerned policy changes and cancellation. The reduction in significant breaches is good news.
An important aspect of the Code is that customers can also report allegations of a Code breach to the LCCC directly. Almost two-thirds of the 149 alleged Code breaches were received directly from customers in that way. Most of those were about the Code’s claims and complaints handling obligations. These clearly need to remain areas of focus for life insurers as the all-important times for customers – when life insurers need to assess a customer’s claim and resolving matters when things don’t go as customers would have liked.
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Awareness of the Code increased
The number of breach allegations increased to 149, from 127 in the previous year. The good news is although this represents an increase of around 17 per cent, the LCCC attribute the increase to an increasing awareness of the Code by consumers.
From the FSC’s perspective, the timing of the LCCC’s report comes at a time when the review of the Code is coming to its conclusion, in perfect time for the learnings to be considered. We are also pleased to note that, along with many consumer groups and other key stakeholders, the LCCC has provided feedback on the consultation draft of Code 2.0.
All that feedback will help the industry on its journey of continuous improvement and help make the next iteration of the Code as good as it can be.
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