Audit unveils inconsistencies in Australian life insurers’ family violence policies
Audit unveils inconsistencies in Australian life insurers’ family violence policies | Insurance Business Australia
Insurance News
Audit unveils inconsistencies in Australian life insurers’ family violence policies
Legal organisation calls for enhanced industry standards and protections
Insurance News
By
Roxanne Libatique
A recent examination by Financial Rights, an independent legal organisation offering legal advice and financial counselling, has highlighted significant differences in how Australian life insurers address family violence.
The audit, conducted in August and September 2023, assessed insurers’ compliance with the Life Insurance Code of Practice, which requires companies to publish policies detailing support for those affected by family violence.
The review compared the insurers’ policies against the Financial Services Council’s (FSC) Life Insurance Family and Domestic Violence Policy, which serves as a recommended, non-binding framework. The aim was to establish a benchmark for current practices and encourage improvement.
Out of 17 life insurers, only one met all 11 suggested areas, while more than half scored 5.5 or less, indicating inconsistent application of the guidelines.
How to improve Australian life insurers’ family violence policies
In response to the audit’s findings, Financial Rights recommended adopting comprehensive measures similar to those found in Noble Oak’s policy, which covers each of the 11 suggested areas.
Additional recommendations included:
implementing safety features like a quick-exit button on websites
offering support to employees indirectly affected by assisting victims
avoiding the requirement for police notifications in cases involving family violence perpetrators
The complete findings, published in May 2024, are accessible on Financial Rights’ website.
Inquiry into Financial Services Regulatory Framework regarding financial abuse
The organisation has also submitted insights to the Parliamentary Joint Committee on Corporations and Financial Services regarding financial abuse within the regulatory framework.
The submission pointed out systemic issues, such as the absence of mandatory preventive measures by financial service providers and the inconsistency in rules across sectors, which complicates the process for victims seeking help.
Key role of financial services providers in tackling financial abuse
Financial Rights emphasised the role of financial services providers in tackling financial abuse, an issue intertwined with the broader goal of ending violence against women and children in Australia.
It highlighted the importance of these providers in identifying, preventing, and addressing financial abuse, thereby supporting victims and reducing the long-term impacts of such abuse.
The organisation calls for clear, enforceable protections for vulnerable customers and suggests that the Australian Securities and Investments Commission (ASIC) be given authority similar to the UK’s Financial Conduct Authority to establish and enforce rules.
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