Life insurers unveil guide to protect family violence victim-survivors

Australian life insurers have introduced a new set of guidelines aimed at improving their response to family and domestic violence.

The “Best Practice Guidance on Family and Domestic Violence,” released by the Council of Australian Life Insurers (CALI), outlined industry-wide measures to support victim-survivors and address financial abuse within life insurance policies.

Compassionate and effective engagement with victim-survivors

The framework was developed in consultation with social enterprise Flequity Ventures, the Independent Collective of Survivors, and CALI’s 20 member companies.

It is designed to ensure that insurers engage with affected customers in a way that prioritises safety, confidentiality, and financial security.

“People often contact life insurance companies during the most difficult moments in their lives. For those who have suffered domestic or financial abuse, just making that first call can be overwhelming,” said CALI chief executive Christine Cupitt.

A recent audit by Financial Rights revealed inconsistencies in how life insurers address family violence in their policies.

The review, conducted in August and September 2023, examined insurers’ compliance with the Life Insurance Code of Practice, which requires companies to outline their support for customers affected by domestic and family violence. The findings compared insurers’ policies against the Financial Services Council’s (FSC) Life Insurance Family and Domestic Violence Policy, a voluntary framework designed to promote best practices across the sector.

The audit identified significant differences in how insurers apply the recommended guidelines. Out of 17 companies assessed, only one met all 11 suggested criteria, while more than half scored 5.5 or lower.

Cupitt said the comprehensive best-practice guide aims to ensure that people in vulnerable situations will be cared for by insurance professionals who are respectful, compassionate, and empowered to assist them in their time of need.

Industry-wide measures to address financial abuse 

The new guidance introduced a framework to help insurers detect and respond to cases of coercive control and financial abuse. Some of the key measures include:

• policy safeguards – ensuring that individuals whose lives are insured are notified when a policy is altered or cancelled to prevent financial abuse
• simplified policy separation – providing support for victim-survivors seeking to separate or modify life insurance policies due to family violence
• enhanced privacy protections – introducing additional confidentiality measures, including secure communication preferences and system flags to protect customers’ information
• easier application processes – clarifying policy wording to help victim-survivors understand their coverage and, where possible, applying prior underwriting assessments for new policies
• trauma-informed claims processing – reducing the need for victim-survivors to repeatedly disclose their experiences and offering flexibility in claims handling
• addressing financial abuse in claims – considering the forfeiture rule in cases where perpetrators of family violence are the beneficiaries of a policy and directing payouts to the court where appropriate
• training for staff – equipping frontline employees with the skills to identify and assist customers experiencing domestic or financial abuse while ensuring staff well-being
• access to support resources – providing referrals to financial assistance and specialist services, with regularly updated resources available on insurers’ websites and CALI’s platform

Flequity Ventures director Catherine Fitzpatrick said the industry’s approach considers financial safety as part of product design.

“The recommended changes will prevent perpetrators from weaponizing life insurance as a tactic of coercive control and provide additional protection and support to victim-survivors,” she said.