Life CCC Cites Breaches and Sanctions
Sanctions were imposed by the Life Insurance Code Compliance Committee (Life CCC) on a life insurer due to significant claim handling delays impacting 358 cases between July 2023 and May 2025. The insurer’s failure to request necessary information from claimants promptly, as mandated by the Life Insurance Code of Practice, led to these delays.
These procedural lapses resulted in some customers experiencing delays of over eight months. the insurer compensated 101 affected customers with interest payments totaling $160,000. Such delays can have severe consequences for policyholders in already challenging situations.
Jan McClelland AM, Chair of the Life CCC, remarked, “People make life insurance claims at some of the hardest moments in their lives,” highlighting the severe impact delays can have.
Causes and Consequences of Delays
Staffing shortfalls, capability gaps, outdated claims practices, and insufficient monitoring were identified by the Life CCC as contributing factors to the breaches. Effective systems to support timely and fair claims handling are essential, the Committee emphasised.
“Good claims handling depends on effective controls working as intended,” said McClelland. “It is important that insurers maintain strong oversight and respond promptly when they see issues emerge.”
The Life CCC’s sanctions included a formal warning and a requirement for the insurer to undergo an independent audit of its compliance with the Code of Practice. This audit will assess the insurer’s processes for requesting claimant information, effectiveness of corrective actions, and its oversight and monitoring arrangements.
McClelland emphasised the importance of early identification and resolution of compliance issues. “When problems emerge, insurers need to act quickly to understand what has gone wrong, fix it, and prevent it from happening again,” she stated.
The case highlights that insurers are expected to request necessary information as early as possible and handle claims without avoidable delay. Continued monitoring of industry compliance by the Life CCC aims to ensure insurers proactively address emerging issues, prevent delays, and minimise customer detriment.
