The Life Code Compliance Committee outlines a strategic plan for 2026-27 focused on improving claims accuracy, transparency, and enforcement amid ongoing industry scrutiny and rising breaches in claims payments and communication.
The Life Code Compliance Committee has set out an agenda for the current financial year centred on the revised Life Code, while stopping short of expecting the updated rules to begin operating during 2026-27. In its work plan, the committee said it wants the next version of the code to be clear, practical and enforceable, with commitments that can be measured and applied consistently across the life insurance industry.
That push comes against a backdrop of long-running scrutiny of claims handling. ASIC’s 2016 review of life insurance claims found that, although most claims were paid at first instance, there were marked differences in denial rates and dispute levels across insurers, especially for total and permanent disability and trauma cover. The regulator also highlighted delays, uneven evidence requirements and the need for better public reporting, stronger dispute resolution and more transparent data on claims outcomes.
More recent conduct issues have reinforced that concern. In December 2022, ASIC warned life insurers to review the accuracy of their claims calculation and payment systems after identifying errors linked to consumer price index adjustments and other benefit-payment mistakes. Several insurers had already needed remediation programmes, and the regulator said the sector had to invest more in systems, controls and monitoring to make sure customers were paid correctly and on time.
Against that backdrop, the Life CCC said it will conduct a thematic inquiry into rising breaches tied to initial claims communication and ongoing income benefit payments. In 2024-25, insurers reported an 84% increase in breaches of the requirement to provide initial claims information within 10 business days and a 67% increase in breaches relating to timely income-protection payments, affecting about 1,676 customers. The committee said the pattern points to weaknesses in governance, onboarding and legacy systems, and it intends to examine the systems, processes and controls behind the failures.
The committee will also review complaints about declined, closed or delayed claims, with a particular focus on whether insurers clearly explained their decisions. That sits alongside work to finalise an existing inquiry into claims-handling delays and continued support for fair mental health underwriting. The committee said it will speak with insurers involved in its 2025 mental health review during 2026-27, but will hold back on broader follow-up until the revised code spells out the industry’s mental health commitments.
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