While the FSC said the soon to be released Code of Practice for Australia’s life offices will “enhance” consumer protections, particularly in areas of underwriting, Nationals Senator John Williams has raised concerns over the code’s contents.
In a statement, FSC chief executive Sally Loane said the Code of Practice is an “industry first” for the life insurance sector and is being developed through “extensive public consultation” with industry stakeholders, consumer groups and regulators.
“The code will commit life insurers to strong standards of customer service, and will enhance consumer protections in the key areas of underwriting and claims,” Ms Loane said.
“The development of industry self-regulation is common across financial services, with the general insurance, banking, customer-owned banking and insurance broking industries all operating similar processes to develop their own codes of practice.”
“The FSC is looking closely at the issues that have arisen within the life insurance industry recently and will consider these in light of the code, which is still under development.”
However, Mr Williams told Risk Adviser that it was “very concerning” that the code was being written by the FSC.
“Wouldn’t you think that if you are in the industry and you are going to write a code of conduct, you would be inclined to protect yourself [and] protect your interests?” he asked.
“That is why I have gotten in the terms of reference for the Senate Economic References Committee inquiry that we look at a code of conduct,” he said.
Mr Williams also stressed that the code of conduct must be mandatory for all life insurers.
According to the FSC, the code of conduct will be discussed in greater detail at the FSC Life Insurance Conference next week.