The number of breaches related to the timely payment of income protection benefits rose 67% in 2024-25, prompting concern at the Life Code Compliance Committee.

However, overall code breaches fell 27% to 10,697, according to the committee’s annual industry data and compliance report.

The number of customers affected by breaches plummeted 87% to 27,289 – a record low since the code launched in 2016.

“It is pleasing to see fewer customers affected by breaches this year, and we hope to see that improvement continue,” committee chair Jan McClelland said.

“However, insurers must ensure their systems, controls and oversight are strong enough to prevent repeat issues and support reliable outcomes for customers.”

The committee will now engage with insurers to understand the rise in income protection benefit payment delays.

Clause 5.63 of the code requires life insurers to pay ongoing IP benefits either by the due date or within five business days of receiving all information.

Breaches of the clause jumped to 1663 from 997 the previous year. The number of customers affected also increased, to 1676 from 1000.

“This code commitment was introduced on July 1 2023 and was the second most breached commitment in 2024-25, emphasising the need for focus and improvement,” the compliance report says. “Breaches of this commitment cause significant impacts to claimants.”

The committee is also concerned at a rise in complaints related to the handling of total and permanent disability claims.

Claims-handling dispute numbers rose to 10,644 from 10,069 in 2023-24.

“This 6% increase was largely driven by complaints regarding TPD claims. Furthermore, complaints about TPD-related claims have increased for the last four reporting periods.

“We will continue our inquiry into claims handling practices, with a focus on timeliness, fairness and customer experience in complex claims, including TPD.”