ASFA welcomes FSC Life Insurance code

The Association of Superannuation Funds of Australia (ASFA) has welcomed the Financial Services Council (FSC) Life Insurance Code of Practice.

The association said the code was a good first step towards implementing life insurance codes to improve consumer outcomes.

ASFA interim chief executive, Jim Minto, said the code would enhance consumer rights and life standards and consistency in the application of processes, such as claims and product management across the life industry.

ASFA said it would be working with other industry bodies and participants on a code for life insurance delivered through super, and highlighted that 70 per cent of life insurance benefits were provided through super.

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"This is enormously efficient and effective with very significant increases in claims payouts over the past five years in particular. It has not been highlighted previously but there has been a revolution in productivity in terms of the cost of delivery of life insurance benefits to people," Minto said.

"Huge productivity gains have been secured, particularly over the past five to 10 years and these benefits have flowed directly to superannuation fund members through higher payouts.

"The downside is that as tremendous growth has occurred, we have not seen the development of consumer protections and uniformity of practice occurring at the same rate."

Minto said the super industry would now embrace the opportunity to work together to lift consumer protections and standards, building from the strong base of the FSC life code.