Our policy issues in focus

Current areas of focus to support an accessible life insurance market in Australia include:

• Insurance in superannuation: insurance is an important feature of the superannuation system and ensures most working age Australians have a base level of insurance coverage and the option to increase their cover within superannuation, subject to underwriting; and
• Financial advice: increasing the availability of life insurance advice is essential to ensuring Australians can confidently obtain life insurance products that best suit them.

CALI members aim to achieve operational carbon neutrality by 2030 or sooner. CALI also supports the Government’s introduction of the climate disclosure regime and participation of life insurers, subject to appropriate timeframes and conditions.

The life insurance industry makes a significant contribution to the lives of Australians as part of the nation’s critical health and social settings.

This is recognised by the Productivity Commission, which believes life insurance forms an important part of Australia’s so-called risk protection system. This consists of a strong and broad insurance ecosystem that includes both private and publicly funded safety nets. The Productivity Commission has recommended that a generational review be undertaken of Australia’s risk protection and social insurance arrangements.

We support this recommendation and believe the time is right to do this important work, particularly with the national focus on the sustainability of Commonwealth programs such as Medicare and the National Disability Insurance Scheme. There is an opportunity to further contribute to the national economy and give Australians peace of mind about their future.

Cyber security risks for Australian businesses and consumers are rapidly evolving every day.

Australia’s life insurers are taking proactive steps to ensure the life insurance industry stays up to date with how to best protect customer privacy and security online.

Life insurers are subject to strong prudential regulation that includes rigorous operational risk and cyber security requirements including for third party service providers.

The availability and affordability of life insurance advice is essential to ensuring Australians can make informed decisions about the life insurance products that best suit them.

CALI supports the elements of the Federal Government’s Delivering Better Financial Outcomes package announced in June and December 2023, which includes measures to support Australian consumers by:

• enabling life insurers to provide Australians with limited advice on their own products, ensuring they can provide answers for simple questions when people ask
• making it easier for superannuation trustees to provide advice to working people, including about life insurance held within their superannuation
• removing red tape and improving transparency around the commissions advisers receive on products.

Australian consumers can seek advice about life insurance from a range of sources but for many people, getting that advice is too expensive or too inaccessible. There are just 16,000 financial advisers to turn to across the country and just 1,000 who are helping people navigate life insurance products.

This has resulted in an unmet financial advice need for working Australians and a growing underinsurance problem that is leaving people unprotected when times get tough. Where a consumer does not wish to engage a financial adviser, they should be able to ask life insurers directly for simple advice about their products.

Currently, it is challenging for life insurers to respond adequately to enquiries. They are wary of providing advice that could be perceived as ‘personal’ and incur penalties for non-compliance to strict industry-wide regulatory obligations. As a result, life insurers are only able to provide generic product information and tell people to engage the services of a financial adviser instead.

It is important for life insurers to put the needs of victim survivors at the centre of their approach.

The Life Insurance Code of Practice requires life insurers to have publicly available policies online about how they’ll support people experiencing family and domestic violence. 

To help improve outcomes for customers, Australia’s life insurers developed an industry guidance note that sets out what should be covered in their policies. This includes:  

• A definition of financial abuse 
• Taking the customer’s reasonable communication preferences into account 
• Using technology to improve customer safety 
• A commitment to Australian customers that their family and domestic violence situation will have no adverse effect on their claim 
• Training to ensure employees are equipped to recognise and respond appropriately to people experiencing family and domestic violence 
• Promoting, enabling and arranging access to financial hardship help 
• Taking family and domestic violence into consideration when designing products 
• Minimising the number of times a person experiencing family and domestic violence needs to disclose information about it 
• Referring customers and employees to specialist support services where appropriate 
• Outlining a procedure for people to lodge complaints with respect to compliance with the customer family and domestic violence policy 
• Regularly monitoring the customer family and domestic violence policy and its associated procedures. 

CALI is reviewing this guidance as part of our ongoing work to improve outcomes for people experiencing family and domestic violence. 

The life insurance industry does not want to deter people from taking genetic tests or participating in scientific research.

CALI supports a ban on life insurers using genetic tests in underwriting, with some limited Government approved exclusions to guarantee fairness for all insured Australians. The Federal Government is expected to make a decision on the future regulation of the use of genetic tests in life insurance underwriting in 2024.

Currently, the Life Insurance Code of Practice sets out how insurers will use genetic tests and ensures Australians can access a suitable level of life insurance without being asked about the result of a previously taken genetic test.

Insurance in superannuation plays a critical role in Australia’s superannuation system by protecting Australians’ balances if they are not able to work through to retirement due to a major illness or injury. It has been an important feature of the superannuation system since the 1980s.

Superannuation trustees began offering life insurance through super as a way of providing affordable cover to people, including those working in higher risk occupations such as construction who would not otherwise have access to it.

Almost 10 million Australians have life insurance provided through superannuation in the form of death cover, total and permanent disability cover and/or income protection cover. For many Australians, the life insurance they hold in superannuation is the only life insurance protection that they have. ASIC has found that more than 70 per cent of superannuation accounts with insurance have the default cover automatically provided by the superannuation trustee.

This approach ensures most working age Australians have a base level of insurance coverage and the option to increase their cover within superannuation, subject to underwriting.

We believe Australians consumers and the broader economy are best served when superannuation is underpinned by life insurance. Life insurance steps in to meet the financial needs of people with a major illness or an injury, which helps protect their superannuation balance and allows them to have a financially secure retirement.

We recognise that some of our members’ customers may experience vulnerability due to a mental health condition. Our members are committed to treating these customers (and their family, carer or support person as applicable) with empathy, compassion and respect.

The Life Insurance Code of Practice (Life Code) sets out specific obligations to providing these customers with extra support, making claims and assisting anyone who has previously lived with a mental health condition to still access a life insurance policy.

We are passionate about helping deliver the protection and certainty Australians need on their best and worst days. For Australians who suffer from an illness or injury, life insurers are currently limited in their ability to help them on the road to recovery and the return to work.

Life insurers can provide rehabilitation that has an occupational or vocational focus. However, legislation prevents them from providing targeted benefits that may otherwise be covered by a private health insurer or are covered by Medicare.

There is great potential for life insurers to develop new products and offerings that would help people recover from illness or injury and return to work. Allowing life insurers to have greater involvement in rehabilitation would help create a more complete support system for people who have an injury or illness that impacts their ability to work.

Specifically, allowing life insurers to fund medical treatment and medical expenses for those eligible under a continuous disability policy would help minimise existing gaps in Australia’s income support and healthcare system that may restrict or prevent an effective return to work. It would also provide greater scope for life insurers to fund, not just promote, evidence-based early intervention and self-management options.

Many life insurers provide retirement income products to support Australians as they manage their financial security in retirement. We are committed to further exploring opportunities to deepen the market for retirement income products in Australia. This will provide more choice and effective solutions for the five million Australian consumers who are at or near retirement.

Specific obligations to customers experiencing vulnerability are included in the Life Insurance Code of Practice.

The Life Insurance Code of Practice (Life Code) sets out how insurers will assist customers through periods of vulnerability, whether they are dealing with language or communication barriers, financial difficulty, health issues, mental health conditions, legal issues or family violence.

CALI supports initiatives to increase the participation of women in the life insurance industry, including women working in life insurers, the financial advice profession and the superannuation industry.

Through our ReCALIbrate program, CALI offers grants to female financial risk advisers to attend key industry conferences. ReCALIbrate recipients are also paired with a senior female life insurance industry leader to provide a forum for mentorship, learning, support and advice.

CALI members report to the Workplace Gender Equity Agency (WGEA) on six Gender Equality Indicators each year. CALI strongly supports WGEA’s aims of promoting and improving gender equality in the workplace and welcomes the publication of the industry’s gender equality performance.

Life insurers also know that more can be done to ensure women have access to suitable, affordable life insurance that protects them and their families when they need it most. For example, CALI is focused on working on reforms to financial advice to improve women’s access to life insurance advice, as well as working to better understand how life insurance can support specific women’s health and disability issues.