Life Insurer Sanctioned After Hundreds of Claim Handling Breaches

The failures occurred between July 2023 and May 2025 and resulted in 358 breaches of the Life Insurance Code of Practice. Some customers reportedly waited more than eight months while their claims were delayed. The insurer later paid a combined $160,000 in interest to 101 eligible customers affected by the delays.

The committee linked the problems to staffing shortages, capability gaps, outdated early-stage claims practices, and inadequate oversight of claims teams and processes. As a sanction, the insurer received a formal warning and must undertake an independent audit of its compliance with the Code, including how it requests information, monitors claims activity and verifies that corrective actions are working.

For Australian households, this story is not just about one insurer’s internal systems. It underlines why transparency, communication and record-keeping matter when choosing and maintaining cover. A policy may look competitive on price, but service quality, claims handling discipline and clear communication can make a major difference when a family is relying on benefits to manage mortgage payments, medical costs or everyday expenses.

Consumers can take several practical lessons from the case:

• When lodging a claim, ask the insurer to confirm what information is required and when it is needed.
• Keep copies of forms, medical reports, emails and call notes so there is a clear record of the claim journey.
• If delays occur, request written updates and ask whether any missing information is preventing progress.
• Escalate concerns through the insurer’s internal dispute process if communication becomes unclear or unreasonably slow.
• Consider speaking with an insurance broker or adviser before applying for cover, especially if you have complex medical history, multiple policies or dependants relying on your protection.

The extension to recent industry news is clear: regulators and code monitors are increasingly focused on whether life insurers deliver on their promises in practice, not just in policy documents. For families comparing life insurance Australia-wide, claims service should be part of the conversation alongside premiums, exclusions and cover amounts.