Major changes to the Life Insurance Code of Practice have been recommended in reviewer Peter Kell’s final report.

The report, released today, proposes 85 measures after an interim report in April tabled 72 suggestions for further feedback.

“In response to submissions on the interim report, some recommendations have been removed, some have been amended and several new recommendations have been added,” the final report says.

“The review found that there are opportunities to improve the code as well as to clarify the commitments it contains. The majority of the 85 recommendations require a change to the code.”

The final proposals address key areas across mental health cover; support for vulnerable customers; First Nations customers; claims handling; and code enforceability.

Significant mental health-related proposals are made after code owner, the Council of Australian Life Insurers, and consumer groups provided feedback.

Mr Kell says the revised code should contain an overall, clear and prominent upfront industry commitment to dealing appropriately with customers experiencing mental health conditions and a prohibition on total exclusions of coverage for mental health conditions in standard form contracts.

He also suggests a requirement that any standard form limitation on mental health cover must be supported by documented actuarial or statistical data and consideration of other relevant factors.

“While a wide range of topics were covered in the review, the most challenging issues arose in relation to the life insurance industry’s approach to dealing with mental health conditions and the increase in claims in this area,” the final report says.

“Going forward, it will be critical for the code to contain strong standards that ensure consumers experiencing mental health conditions are treated fairly and transparently, while also enabling insurers to respond to sustainability challenges.

“While there is a set of recommendations designed to help achieve these objectives, this will require further work by the industry in consultation with stakeholders to develop the approach to mental health in the code.”

CALI says it will release an initial industry response by September 30.

“Many people and organisations have contributed their time, insights and expertise to the review,” CALI CEO Christine Cupitt said. “We will continue to engage with them as the industry now carefully considers the final report and its 85 recommendations.”

See the final report here.