The life industry must step up as mental health claims continue to rise, the Australian Financial Complaints Authority told a member forum last week.

“This is a very important issue, as mental illness is widespread in our community, with one in five adults affected yearly, and with anxiety being the most prevalent mental illness in Australia,” lead ombudsman Emma Curtis said.

AFCA head of systemic issues Joanna Sims said the authority sees too many cases in which complainants feel the claim process is “too hard, too slow or slower than it should be”.

“From a systemic issues perspective, really the biggest issue remains inconsistency and fragmentation,” Ms Sims said. “Assessments can sometimes be really uneven, so we’ve seen some firms investing in specialist training and partnerships with really great mental health experts.

“But I guess on the flip side, we’ve seen others rely on really generic templates or outdated exclusions, which is a concern.”

The Life Code Compliance Committee raised similar concerns around exclusions in a report released in September.

AFCA senior manager of code compliance Jared Orth said: “We have seen insurers moving away from the use of those blanket mental health exclusions, but we did see and find some instances where there were effective blanket exclusions created by very broad terms around mental health conditions … so that just needs to stop.”

The ombudsman’s data for the September quarter shows 442 complaints were lodged against life insurers and 93 were resolved at the registration and referral stage.

Last financial year, the ombudsman received 1518 life insurance complaints, with income protection products the biggest source of disputes.