A life insurer has been “put on notice” after more than 10,000 customers received annual notices that were inaccurate, incomplete or late.

Some notices failed to list the correct premium or include a bonus benefit. Others were issued after policy anniversaries.

The unnamed insurer reported that 10,105 breaches of the Life Insurance Code of Practice occurred during a migration of legacy products.

It has received a formal warning from the Life Insurance Code Compliance Committee and must now show its internal governance, controls and assurance arrangements can prevent repeat problems.

“A formal warning puts the insurer on notice that these failures were serious and that stronger enforcement action may follow if further non-compliance occurs,” code committee chair Jan McClelland said.

“It is not enough to correct individual notices after problems have affected thousands of customers. The insurer must show that it has addressed the underlying weaknesses and can meet its commitments in practice.”

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Delays by a third party engaged to distribute annual notices accounted for 4686 of the breaches. The committee says weaknesses in systems, compliance oversight and assurance arrangements were the cause.

The insurer first identified an issue following a customer complaint and reported it as a significant breach in April last year.

A review identified additional breaches between August 2024 and January this year. The sanction was issued on May 26.

The code committee says insurers need controls that prevent errors, monitoring that identifies problems early, and clear oversight of every party involved in delivering communications.

“Product migrations can involve complex systems and large volumes of customer information, but they must not compromise the accuracy or timeliness of essential communications,” Ms McClelland said.

The insurer has updated its annual notices, corrected policy information and issued communications, and corrected notices to the affected customers. It has also acted improve its systems, monitoring and oversight of the third party.

See the case summary here.