Life Insurance Code of Practice Review: Key issues and next steps

The independent review of the Life Insurance Code of Practice has reached an important milestone, with the Final Report prepared by Peter Kell released on 30 June 2026.

The Life Code sets standards that participating life insurers commit to meeting when dealing with customers. It covers the full insurance journey, including product design and sales, communication, support for customers experiencing vulnerability or financial hardship, claims handling and complaints. Compliance is monitored by the independent Life Code Compliance Committee, which can impose sanctions and financial penalties.

The Kell review considered whether the Code continues to meet community expectations, operates effectively in practice and remains aligned with regulatory and legislative developments. It was informed by consultation with consumer representatives, regulators, superannuation and insurance stakeholders, medical experts and other interested parties. The Final Report contains 85 recommendations, most of which would require changes to the Code.

Why the review matters

For superannuation trustees, the Life Code is an important part of the framework supporting members who receive life insurance through superannuation. Although trustees and insurers have different responsibilities, members experience insurance as a connected service. Clear, practical and aligned standards can support timely claims, effective communication and appropriate assistance when members are experiencing difficult circumstances.

The review is also occurring alongside the development of the Australian Government’s proposed mandatory service standards for superannuation. As these reforms develop, it will be important to maintain clear roles and avoid conflicting obligations or timeframes across trustees and insurers. Effective implementation will therefore require continued coordination between the life insurance and superannuation sectors.

More broadly, the review provides an opportunity to strengthen customer protections while supporting the long-term accessibility, affordability and sustainability of life insurance.

Key issues arising from the review

• Mental health: The Final Report recommends retaining an existing prohibition on total mental health exclusions in standard-form contracts. Limitations short of a total exclusion may be permitted where they are supported by appropriate evidence and reviewed regularly. It also proposes new commitments on communication and transparency, including clearer information for customers and further industry guidance. 
• Claims handling: A significant group of recommendations concerns claims timeframes, communication and support. These include standards for regular claim updates, arrangements for a primary contact and revised approaches to circumstances beyond an insurer’s control. For insurance in superannuation, these changes will need to work effectively across trustee and insurer processes, particularly for complex claims requiring information from medical practitioners, employers or other third parties.
• Customers requiring additional support: The report recommends stronger obligations to identify and assist customers who may be experiencing vulnerability or financial hardship. These proposals reinforce the importance of accessible communication, appropriate referral pathways and coordinated support across the member journey.
• Medical definitions: The report proposes moving selected medical definitions into a separate guide maintained by an expert panel. This is intended to allow definitions to be reviewed more regularly as medical knowledge and practice evolve.
• Governance and enforceability: The report also considers oversight, compliance and the future enforceability of Code commitments. Some questions, including how the Code interacts with wider regulatory reforms, will require further work.

Next steps

The Council of Australian Life Insurers (CALI) is considering the recommendations and intends to publish an initial industry response by 30 September 2026. Topic-specific work, including further engagement on mental health, will inform the drafting of the next version of the Code.

The drafting of a new version of the Code addressing the Kell report is expected to begin from October 2026, followed by further stakeholder and regulatory engagement. The current timetable targets publication of the revised Code in late 2027 and commencement in mid-2028.

TAL will continue engaging with our superannuation partners as the detail develops, particularly where proposed changes affect shared claims processes, member communications or service standards. If you should have any questions about the Code or the redrafting process, please do not hesitate to reach out to your TAL contact.