An unnamed life insurer has been given a formal warning after reporting 10,105 breaches of the industry code of practice.

“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,” Life Insurance Code Compliance Committee 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.”

The insurer sent customers annual notices that were inaccurate, incomplete or late during a migration of its legacy products.

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

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 identified an issue following a customer complaint and reported it as a significant breach in April last year. A review found more breaches between August 2024 and January this year. The sanction was issued on May 26.

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.