Premium increases in the life insurance industry – APRA

The Australian Prudential Regulation Authority (APRA) and Australian Securities and Investments Commission (ASIC) have seen complaints from consumers, and reportable situations from insurers, about premium increases in retail life insurance policies. 
 
We are concerned that some life companies:
These concerns indicate that some life companies do not have effective systems, processes, and controls in place to ensure:
 
We request all life companies that write, or have written, retail life insurance policies to review past:
 
We acknowledge that ensuring the ongoing sustainability of life insurance products is a challenging issue. APRA’s measures related to individual disability income insurance (IDII) have set clear expectations on the design of sustainable products, including the need to provide policyholders with reasonable premium stability.¹
Building on these expectations, life companies should:
 
We request that all life companies that write, or have written, retail life insurance policies respond to ASIC by 31 March 2023, outlining:
– premium increases which may not have been applied in accordance with the applicable policy terms; and 
– disclosure and marketing material which may have misled policyholders about the premiums they would have to pay;
We acknowledge that some insurers may not be able to complete the review by 31 March 2023. In this case, we expect an update by 28 February 2023 on the steps being taken to complete the review and the likely timing. ASIC will arrange meetings to discuss individual responses in April-May 2023.
Should you have any questions about the content of this letter, please contact Pippa Lane, ASIC Senior Specialist, on +613 9280 4392 (or pippa.lane@asic.gov.au) or Ilanko Sellathurai, APRA Senior Manager, on +612 9210 3014 (or ilanko.sellathurai@apra.gov.au).
 
Yours sincerely,
Signed  
 
¹ Final IDII sustainability measures; Suspension of Policy Contract Term measure.

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