Insurer Compensates Claimants in Wake of Transition Issues
Insurer Compensates Claimants in Wake of Transition Issues
The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.
On September 2, 2024, an insurer has been mandated to compensate over 900 policyholders due to its failure to adhere to claims processing time frames outlined in the Life Insurance Code of Practice.
The Life Code Compliance Committee reported that the insurer failed to meet the necessary timelines for handling claims, resulting in 3580 breaches between November 2022 and August last year. This failure predominantly affected policyholders with income protection and total permanent disability coverage from a superannuation fund.
The issue arose following the insurer and the fund's decision to transfer claims processing responsibilities from a third-party service provider back to the insurer. The transition period saw numerous staffing issues at the third-party organization, which critically hampered its ability to meet the code's stipulated time frames for claims processing, the committee's investigation revealed.
The committee's findings indicated that the insurer violated several provisions of the claims handling process defined in the code. Specifically, the insurer failed to:
Inform customers about the claims process within 10 business days;
Provide updates on the progress of claims every 20 working days;
Notify customers in advance when their income protection claim payments were nearing their end.
"Insurers must ensure their change management plans allocate adequate resources to meet service standards and prescribed time frames," the determination stated. "Utilizing effective risk mitigation strategies is crucial in countering potential issues, thereby protecting against disruptions and safeguarding customer interests during transitions."
Post-transition, the insurer took over claims management on July 1 of the previous year and initiated several steps to bolster compliance with the code. The company formed new teams and conducted training focusing on code requirements and system utilization.
"The insurer has augmented its oversight of claims processing by increasing case conferencing, setting up weekly performance tracking, and holding monthly governance meetings," the determination noted. "These improvements led to noticeable increases in compliance rates regarding time frame obligations, which became more stable starting in December."
These measures indicate significant shifts in how the insurer manages and processes claims, fostering better service standards and accountability.
Please Note: We do not endorse any specific products or companies. Some content is sourced from third parties, including press releases, and may not be independently verified for accuracy or completeness.
The Australian government has approved a 4.41% increase in health insurance premiums, set to take effect in 2026. This adjustment reflects the rising costs associated with healthcare services and the need to maintain the sustainability of the health insurance sector. - read more
The Australian insurance sector is currently grappling with significant challenges, notably the affordability of premiums for consumers. A recent survey by Gallagher Bassett highlights that premium affordability, cybersecurity, and labour shortages are the top concerns for insurers in 2026. ([insurancenews.com.au](https://www.insurancenews.com.au/daily/industry-reshapes-priorities-amid-price-cost-pressures?utm_source=openai)) - read more
The Australian commercial insurance market is witnessing a notable decline in rates, driven by intensified competition and an increase in insurer capacity. According to reports from global brokers Marsh and Aon, the Pacific region experienced a 12% reduction in commercial insurance rates during the last quarter of 2025, marking the most significant drop since early 2024. ([insurancenews.com.au](https://www.insurancenews.com.au/local/commercial-pricing-tipped-to-stay-soft?utm_source=openai)) - read more
The Australian insurance industry has recently faced a substantial decline in profits, primarily due to a series of severe hailstorms that occurred in October and November 2025. Data from the Australian Prudential Regulation Authority (APRA) reveals that the general insurance sector reported a net profit of $132 million in the December quarter, bringing the annual total to approximately $5.8 billion. This marks a decrease from the $6.8 billion profit recorded in 2024. ([insurancenews.com.au](https://www.insurancenews.com.au/local/industry-profit-sinks-as-hail-hits-home?utm_source=openai)) - read more
Registered building practitioners in New South Wales are facing a critical deadline to secure professional indemnity (PI) insurance by July 1, 2026, in accordance with the Design and Building Practitioners Act 2021. This legislation, which originally set a 2025 enforcement date, has been extended by 12 months to allow the industry additional time for preparation. - read more
Income protection is an integral part of maintaining your financial security, especially in the event that unforeseen illnesses or injuries prevent you from working. Enabling you to receive a percentage of your regular income, this type of insurance provides a safety net, ensuring that you can continue to cover your living expenses and financial obligations whilst recovering. - read more
Financial security is a cornerstone of peace of mind, particularly when life is known for its unpredictability. This introductory section sheds light on the vital nature of income protection insurance and its role in safeguarding Australians' financial well-being. Ensuring continual financial inflow during times of illness or injury not only offers stability but also protects one's standard of living. - read more
Accidental income protection insurance is a type of policy that provides financial support if you are unable to work due to an accident. Unlike regular income protection insurance, which can cover illnesses and injuries, this specific insurance focuses solely on accidents. - read more
Welcome to our comprehensive guide on securing your financial future in Australia. In a world of uncertainties, income protection insurance plays a critical role in maintaining your financial security and peace of mind. - read more
Income protection insurance is a type of personal insurance that provides financial support if you are unable to work due to illness or injury. It ensures that you continue to receive a portion of your income, helping you manage daily expenses and financial commitments during recovery. - read more
Knowledgebase
Public Liability Insurance: Insurance which provides protection against liability to third parties.
