Life Insurers Move to Rewrite Code After Review

The response follows the final independent review led by Peter Kell, which made 85 recommendations across mental health, vulnerability, First Nations access, claims processes, medical definitions, sales conduct and code oversight. CALI’s position is not a finished rewrite of the code. Instead, it sets out areas the industry says it can support now, areas where it proposes a different method, and issues that will need more detailed consultation before final wording is settled.

The most important signal for business owners is that several difficult issues are being moved into four priority workstreams running from October 2026 to June 2027. Those workstreams cover mental health, claims handling, First Nations matters and funeral insurance. The claims handling workstream is especially relevant where cover is intended to protect business cash flow after the death, serious illness or disablement of a founder, director, revenue producer or technical specialist. A policy benefit may be valuable on paper, but delays, unclear requests for information or inconsistent communication can undermine its practical usefulness at the point of disruption.

The mental health component also deserves close attention. CALI has supported clearer consumer information and has indicated that standard form disability insurance contracts should not automatically exclude all mental health conditions. However, the industry also wants room for product design features such as limits, waiting periods, eligibility criteria or alternative underwriting terms where permitted by law. That means future wording may improve transparency without necessarily making every form of cover broader or cheaper.

For businesses reviewing key person insurance, the practical takeaway is not to assume the new code will solve every complexity. It is a reminder to read definitions, exclusions, evidence requirements and claims timeframes before cover is needed. Businesses may also wish to sense-check how they estimate cover amounts, because a well-structured policy depends on both the insured events and the financial impact the business is trying to manage.

The next test will be whether consultation produces clearer, enforceable and workable standards without adding complexity that customers cannot navigate. Until the revised code is finalised, the current message is one of cautious progress: stronger commitments are on the table, but the details that will affect claims experience and product design are still being negotiated.