The Financial Services Council (FSC) has published the new Life Insurance Code of Practice (Life Code), which will commence on 1 July 2023.
The changes to the Life Code include issues dealing with:
- Pressure selling
- Training & remuneration
- Third party distributors
- Extending 30 days cooling off to all sales of long-term policies
- Coercive retention techniques
- More support for vulnerable customers
- Life insurers to have a family and domestic violence policy on their website
- Surveillance.
The Code covers Life Insurance Policies issued in Australia, including policies commonly called:
a) term life or death and terminal illness insurance
b) total and permanent disability (TPD) insurance
c) trauma or critical illness insurance
d) disability insurance
e) income protection or salary continuance insurance
f) business expenses insurance
g) Funeral Insurance and funeral expenses insurance, and
h) consumer credit insurance (CCI), if issued by a life insurer.
The Code does not cover:
a) whole-of-life and endowment insurance products
b) products issued by general insurers
c) health insurance products issued by health insurers, or
d) annuities and investment life products, as defined in sections 9(1)(c), (d), (f) and (g) of the Life Insurance
Act 1995.
The new Life Code gives the Life Code Compliance Committee increased powers to impose sanctions for breaches, including potentially requiring a community benefit payment to a charity.
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Author: David Jacobson
Principal, Bright Corporate Law
Email:
About David Jacobson
The information contained in this article is not legal advice. It is not to be relied upon as a full statement of the law. You should seek professional advice for your specific needs and circumstances before acting or relying on any of the content.
