The Financial Services Council (FSC) has announced two major initiatives which it hopes will improve outcomes for life/risk consumers, aimed at extending the practice code to cover superannuation trustees and enhancing consumer understanding.
The mandatory Life Insurance Code of Practice would be extended to super trustee members through a new standalone chapter in the existing Life Insurance Code of Practice. The current code, which applies to life insurers, would become the first chapter of the new code.
The new chapter would extend cover by the code to the FSC’s 15 super trustee members, which combined accounted for $500 billion across more than 12 million super accounts.
“The life insurance industry has already demonstrated its willingness to lift customer protections through the establishment of its first Code of Practice in July last year,” FSC chief executive, Sally Loane, said.
“Similar minimum standards can and should be extended to people who have life insurance in super.”
On announcing the initiative, the FSC said that including the Trustee obligations in the existing FSC Code of Practice meant consumers would be able to find the minimum service standards they can expect from insurers and superannuation trustees in relation to all aspects of life insurance in one place.
The FSC also announced a new data project, which was the result of work with the industry, the Australian Securities and Investments Commission and the Australian Prudential Regulation Authority, targeted at bringing about an industry-wide approach to the collection of aggregate industry data.
The project would do so for the benefit of consumers, with the FSC saying it reflected a strong commitment from its insurance members to increase transparency and consumer outcomes.
“For the first time, armed with a large scale base of reliable statistics, the industry will be able to show how much it pays in claims per impairment, broken down by dollar value and by the number of Australians that receive the benefit,” the Council said.
