Labor notes the first ever Code of Practice which is an initial step towards improving standards in the life insurance industry.
Life insurance is an important way for Australians to financially protect themselves and those close to them. It can provide essential funds and income protection in times when they suffer from illness, injury, disability or the death of a close family member.
Labor believes that this first voluntary Code is a step in the right direction but much more work needs to be done to rebuild consumer trust and confidence with life insurance in light of the recent cases of mistreatment of holders of life insurance policies.
Labor notes the concerns of consumer advocates who say that greater thought needs to be given to issues including:
• Claims timeframes that apply for life insurance products that are attached to superannuation accounts which appear to be neglected in this Code
• The independence of the ‘relevant’ medical specialist who does not have to be independent of the insurers under the Code
• The medical definitions of certain conditions associated with claims, and,
• The status of the Code under the existing legal framework in Australia where it appears not to be enforceable in a court of law.
Labor will be watching the proceedings of the current Joint Parliamentary Committee on Corporations and Financial Services into the life insurance industry closely.
We will also be keeping a close eye on how this Code is implemented and will continue to work with consumer advocates and the insurance industry with a focus on improving protections for consumers within the life insurance industry.