What are the core responsibilities of life insurance companies in Australia?
- All Australian insurance firms follow certain laws and regulations to ensure that they act in the best interest of their clients.
- Failure to do so will result in a breach of official regulations, which could result in damage of their reputation.
No matter what type of insurance plan or coverage you have bought or are planning to buy from an insurance provider, the duties and responsibilities that the provider has to adhere to remain the same. This is because these duties do not relate to a specific type of product or service but to the insurance industry as a whole. There are a number of core duties and responsibilities that insurance companies have, which are as follows:
- To not discriminate against potential and existing customers: Insurance companies do have the right to refuse coverage or even cancel existing coverage based on a range of factors. This could include anything from refusing coverage based on the risk that a potential customer poses to cancelling coverage due to false information or non-payment of premiums. However, what the insurance provider cannot do is to refuse cover or cancel existing coverage based on things such as the person's race, sexual orientation, marital status, religion or disabilities. Insurance firms also cannot make changes to the terms and benefits of an insurance policy based on these factors
- Be fair and honest: When it comes to their business practices, insurance providers have to act with fairness and honesty, which means that using deceptive and unfair processes in order to stay a step ahead of the competition or to try and tempt new customers on board is out of the questions. Some of the practices that would be classed as unfair and which insurance firms can therefore not use include making false statements, misinterpreting insurance policies intentionally, impersonating clients, and taking part in bidding wars
- Make payments on claims: The whole reason for consumers taking out insurance cover and paying premiums is so that they will receive a payout in the event of certain situations and circumstances that lead them to make a claim. Of course, the claim does need to be a valid and honest one and as long as it is, the insurance provider has a duty to pay out on the claim as per the terms of the policy and should do so in an efficient and timely manner
- Legal handling of premium payments: For as long as the insurance firm is receiving premium payments from the customer, it must ensure that it handles these payments legally and continue to provide coverage to the consumer. Any excess premiums cannot be kept by the insurance firm and must be returned to the consumer within a reasonable amount of time
- Efficient claims handling: Insurance providers need to ensure that all claims are handled efficiently and in line with their specified terms. Full payment should be made promptly in the event of a valid claim. In cases where the insurance firm is refusing to make a payout a full, honest and valid reason for the rejection of the claim must be provided. Providers cannot attempt to blackmail clients that make claims such as threatening to cancel their coverage if they refuse an offer of settlement. They are also not allowed to harass or hassle clients over any insurance claim that they are making.