The insurance industry has welcomed the new Life Insurance Code of Practice (LICOP 2), developed in consultation with life insurers.
Implemented on July 1, LICOP 2 outlines the life insurance industry’s main commitments and obligations to customers on standards of practice, disclosures, and principles of conduct. It reflects numerous changes to the first LICOP introduced in 2016, spanning sales, underwriting, premium disclosures, claims, mental health, vulnerable customers, sanctions, clarity on navigating the code, and introducing new enforceable provisions.
Zurich Australia and New Zealand CEO Justin Delaney said LICOP 2 is a significant milestone for Australian life insurers and delivers on the industry’s commitment to protecting customers.
“At Zurich, we take acting in the best interests of our customers seriously and we support maintaining an industry-wide approach that holds all insurers to a high standard. The new code will impact all facets of our customer interactions, from how products are designed, to how they are sold, through to the claims experience,” Delaney said.
Zurich was among the life insurers consulted for the development of LICOP 2. It worked closely with supply and outsourcing partners, implementing new frameworks and procedure to ensure that they comply with LICOP 2.
Delaney added: “In preparation for the new code, Zurich revised its policies and procedures, made systems enhancements, improved customer communication approaches, rolled out employee training, and uplifted its vulnerable customer and complaints management frameworks.”
Christine Cupitt, CEO of the Council of Australian Life Insurers (CALI) – whose 19 members are subscribed to the life code – said LICOP 2 will enable the life insurance industry to become more accessible, understandable, and trustworthy.
“Australian life insurers have listened to the needs of their customers and the community by developing an updated life code that sets a higher bar for the industry,” Cupitt said. “The new life code will deliver better outcomes for Australians, tougher penalties for conduct breaches, and strong independent enforcement.”
CALI reiterated its commitment to expanding customers’ access to life insurance that suits them – in an accountable and transparent way.
“With this newly updated life code, our members can continue to deliver the protection and certainty Australians need on their best and worst days,” Cupitt said. “CALI is committed to ensuring Australians have peace of mind about their financial and overall wellbeing as they face life’s biggest challenges.”
LICOP 2 has 50 additional consumer protections, including:
The LCCC closely monitors the life insurance industry’s application of the life code and individual insurers’ conduct.
LICOP 2 provides the committee with increased powers to impose sanctions and financial penalties on organisations subscribed to the life code. These measures have been developed in conjunction with consumer groups to ensure they are appropriately robust.
