FSC alters Code of Practice amid CommInsure fall-out
The Financial Services Council has announced a key alteration to its Life Insurance Code of Practice in the wake of the allegations against CommInsure, with the addition of a steering committee which will include consumer representatives and the Financial Rights Legal Centre and the Consumer Action Law Centre.
The change was announced by Financial Services Council (FSC) chief executive, Sally Loane when opening the FSC's annual Life Insurance Conference during which she acknowledged the criticism that the life insurance e sector was not capable of self-regulation.
She described the creation of the Steering Group as a strengthening of the code of practice.
"In order to ensure consumer protections are even stronger, we will add a Steering Group to our Code development process which will include consumer representatives, the Financial Rights Legal Centre and the Consumer Action Law Centre, as well as senior life insurance executives," Loane said. "The consumer representatives will work closely with our members to identify where we need to strengthen consumer protections in our Code."
The FSC CEO said the Code of Practice would ne a living document, updated where necessary.
"The Code of Practice for Life Insurance is being built on some fundamental principles: honesty, transparency, fairness and timeliness. Improved disclosure and communication with consumers will be a central tenet of the Code. When a customer takes out a new policy, or when there are changes to a policy, key information needs to be provided in plain language, so they can properly understand what has been bought," she said.
Loane directly reference the claims process as being "fundamental to the customer experience, when people are at their most vulnerable, so this has been a strong focus of our work in developing standards".
"We are looking at the sort of additional support that vulnerable consumers may need if they are having difficulty with the process of buying insurance or making a claim," she said. "This could include identifying and supporting people suffering from mental illness, elderly customers, those who require the use of an interpreter, people living in remote communities, or those customers with very low levels of literacy."
"Financial hardship has also been an area that has been raised in our consultations, so we are looking at options available to consumers if they are having trouble meeting premium payments, or if they are suffering urgent financial need while a claim is being assessed."
"The FSC will work with the industry throughout the transition period to assist members to raise standards in line with the Code, to ensure a high level of compliance."
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