The Life Code Compliance Committee has reminded insurers of the importance of identifying renewal notice failures and their impacts and providing timely and effective remediation. 

“Failures in processes and systems can result in customers missing important information about their cover and, in some cases, contribute to policy cancellation or other customer detriment,” it says. 

In a case study, an insurer identified that a system migration error caused it to record some customer address information incorrectly, leading to a failure to issue annual renewal notices on 92 occasions, affecting 87 customers. 

In three cases, the insurer cancelled policies for non-payment after customers missed relevant communications. It also failed to tell them that it had cancelled their policies or whether they could reinstate their cover. 

After it identified the renewal notice failures it sent apology letters, refunding base premium rate increases with interest and reinstating cancelled policies. 

“Following the insurer's initial response and our engagement, the insurer reported providing additional time for two customers seeking to reinstate policies the insurer had cancelled for non-payment of premiums,” the committee says. 

The compliance reminder says the committee continues to identify cases where insurers do not provide annual renewal notices as the code requires, particularly when changes to processes and systems affect how notices are issued. 

“When insurers identify a failure, they should establish its extent, identify the full financial and non-financial detriment to affected customers, and provide timely and effective remediation,” it says.