An unnamed life insurer has been sanctioned over “significant” claim processing delays that in some cases stretched to more than eight months.

The insurer did not request information from claimants at the “earliest available opportunities”, as required under the industry’s code of practice.

The lapses occurred between July 2023 and May last year and resulted in 358 breaches, the Life Code Compliance Committee says.

“Some customers experienced delays of more than eight months on their claims, with the insurer later paying a combined total of $160,000 in interest to 101 eligible customers affected,” the committee said. “The issue arose due to staffing shortfalls and capability gaps, as well as inconsistent and outdated practices for managing claims in their early stages.

“The issue was exacerbated by insufficient monitoring and oversight of the claims teams and their processes.”

In March, the committee issued the insurer a formal warning and ordered it to undertake an independent audit of its compliance with the code.

The committee can name insurers for significant breaches, depending on their severity.

It says the insurer identified the failures and self-reported them as a significant breach in July 2024.

“Once the insurer identified the breach, it investigated the cause, duration and scope of the issue and implemented a series of corrective actions … The insurer took these actions to prevent recurrence and improve ongoing compliance with the code.

“Furthermore, the insurer apologised to customers whose claim payments were affected by delays, and paid interest to the impacted customers.”