LCCC to check genetic tests
The compliance body which polices the insurance industry has been exposed as a toothless tiger – only ever sanctioning one insurer.
The Life Code Compliance Committee (LCCC), meant to investigate breaches of the insurance industry’s code of practice, investigated just two of the 747 complaints it received from the public in 2018-19, a study has found.
In its existence, it has only ever sanctioned one insurer and has had no meaningful financial penalties to impose.
Its powers have been limited to issuing formal warnings or publicly naming an insurer as non-compliant with the Code. From July, it’s remit will expand to include monitoring compliance on genetic testing rules.
And it will for the first time be able to impose financial penalties in the form of a community benefit payment paid to a registered charity.
In 2018-19, in its annual report, the committee noted it “has been left with the impression that a number of subscribers were not taking their Code compliance obligations and the Code’s true purpose seriously”.
An academic review by Monash University found the LCCC has no real authority, “it lacked resources to investigate all of the breaches notified to it”, and it can’t even boot offending insurers out of the Financial Services Council that set it up.
“I’m hoping we will get a government ban on insurers using genetic tests and the legislation can be overseen by the government,” Monash University researcher Dr Jane Tiller said.
LCCC chair Jan McClelland said: “The LCCC carefully considers every concern raised with it. Last financial year the LCCC completed 216 investigations of alleged breaches of the Code and published 41 determinations.”
Life insurers did take the LCCC seriously, she said.