11 October 2016
Media Release - #2016090, 2016

Government welcomes release of Life Insurance Code of Practice

The Turnbull Government welcomes today’s release by the Financial Services Council (FSC) of the Life Insurance Code of Practice (the Code). This is a positive step in improving consumer outcomes and builds upon a number of other measures announced by the Government, including reforms to life insurance remuneration frameworks, to better align the interests of financial advisers and consumers.

The Code, along with other reforms announced by the Government on 6 November 2015, is designed to address the recommendations contained in the Final Report of the Review of Retail Life Insurance Advice (the Trowbridge Report), released in March 2015.

The Code sets out minimum standards for the life insurance industry and covers a wide range of issues, including:

  • Policy design and sales practices;
  • Cancellation rights and policy changes; and
  • Claims management and complaints and disputes.

The FSC has been working on the Code since August 2015 and has engaged extensively with its members and a wide range of stakeholders in the process of drafting the Code. The Code is mandatory for all FSC members and will commence on 1 July 2017.

The release of the Code is a significant achievement by the FSC and the life insurance sector as whole, but importantly only marks the beginning of an ongoing process, as the Code is refined and further developed.

The Government encourages the FSC and life insurance industry to continue to work on improving consumer outcomes in this vital sector of the financial system. Importantly, the Government expects that the FSC and industry will continue to work towards expanding the coverage and scope of the Code to more fully cover group insurance arrangements within superannuation, and will take the necessary steps to ensure that the Code is enforceable across the whole industry, by gaining ASIC approval of the Code.