23 October 2025
Attorney-General’s Department Australian Government 3 - 5 National Circuit Barton ACT 2600
Via the website only: https://consultations.ag.gov.au/rights-and-protections/dda-issues-paper/consultation/
Dear Attorney-General’s Department
We welcome the opportunity to contribute to the consultation on the Review of the Disability Discrimination Act 1992 (DDA).
Our submission responds to Consultation Question 33, which asks whether the permanent exemption for insurance under Section 46 could be narrowed or updated while balancing other policy considerations.
The Life CCC and the Life Insurance Code of Practice
We are the independent body that monitors compliance with the Life Insurance Code of Practice (the Code). Our purpose is to monitor compliance with the Code and drive best practice in the industry, promoting better outcomes for customers and the community.
Twenty life insurers currently subscribe to the Code. They are all members of the Council of Australian Life Insurers (CALI), the owner of the Code.
The Code is a set of service standards intended to complement existing legislation, including obligations that intersect with Section 46 of the DDA, particularly in how insurers treat applicants and claimants.
As the body that oversees compliance with the Code, we are interested in how the Section 46 exemption is applied in practice and support improvements to ensure that differential treatment is transparent and free from unjustified discrimination against consumers.
Section 46 Exemption
We support the continuation of the permanent exemption that allows insurers to make distinctions based on disability, provided these are supported by reasonable actuarial or statistical data, or other relevant factors. This exemption is essential to balance fairness and equity in access to insurance with the long-term sustainability of the life insurance sector.
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We also recommend measures to ensure the exemption is applied appropriately and in line with its intended purpose. In particular, we see value in clearer expectations and greater transparency for the evidence insurers rely on when making decisions that differentiate based on disability.
2018 Parliamentary Joint Committee report on the life insurance industry
Recommendation 10.2 of the 2018 Parliamentary Joint Committee report stated:
The committee recommends that a requirement be inserted, where necessary, into both the Insurance Contracts Act 1984 and the Disability Discrimination Act 1992 to the effect that an insurer must provide a person with written reasons when an application for insurance has been rejected or an insurance claim denied. The committee further recommends that the written reasons be provided as a plain English summary of such evidence and be targeted to the part of a person’s medical history relied on by the insurer. The committee also recommends that the statistical and actuarial evidence and other material relied on by the insurer be available on request.
This recommendation has not yet been implemented. Its implementation would enhance transparency and accountability in decision-making, helping ensure that Section 46 supports fair and transparent practices.
The Code
The Code currently requires insurers to provide applicants with the reason their application for insurance is offered with alternative terms (clause 4.22) or rejected (clause 4.25). However, it does not require that these reasons be provided in writing, and it is unclear and inconsistent about the need to include specific evidence linked to the part of the person’s medical history that the insurer relied on.
The Code also requires insurers to give claimants written reasons when they deny a claim, along with a summary of the information they relied on for the decision (clause 5.58). It further requires insurers to communicate to customers in plain language at all times, unless medical or other technical terminology is necessary (clause 1.1).
These are important protections that help customers understand the reasons for a decision and support a decision to seek a review or make a complaint.
We would like to see these commitments strengthened to reflect recommendation 10.2, by requiring insurers to:
- communicate decisions in writing
- provide a summary of evidence relevant to the part of a person’s medical history they relied on
- make the statistical and actuarial evidence and other relevant factors they used to make a decision available on request.
The Code is currently under review, providing a timely opportunity for the industry to strengthen its commitments to transparency and accountability. This process also presents an ideal moment to consider how the permanent exemption under Section 46 is applied in practice, and to ensure it operates as intended - fairly, consistently, and supported by robust evidence.
Accountability for Actuarial and Statistical data, and other relevant factors
We support the need for the actuarial data, statistical data, and other relevant factors insurers rely on under the Section 46 exemption to be ‘reasonable’.
Life CCC response to the Review of the Disability Discrimination Act. 2
With the exemption to discriminate comes a significant responsibility to ensure that the data underpinning decisions is contemporary, robust and fair. Insurers must take care to ensure the information they rely on remains relevant and based on evidence as community expectations, health outcomes and available data evolve over time.
Transparency is essential to drive good practice, strengthen accountability, and build public trust and confidence in the fairness of the approach.
We note that Australian Prudential Regulation Authority’s (APRA) Prudential Standard CPS 320 Actuarial and Related Matters requires life insurers to maintain an actuarial advice framework. Under this framework, an Appointed Actuary must provide impartial advice on the valuation of insurance liabilities, assess the insurer’s financial condition annually, and submit a report to APRA. These obligations are designed to support sound and prudent risk management and to ensure that policyholder interests are appropriately considered. This framework may provide an avenue to ensure robust oversight of the implementation of the DDA exemption in practice.
Our 2025 inquiry into mental health underwriting
We recently undertook an inquiry into how insurers meet their mental health-related Code commitments when making underwriting decisions. The inquiry examined the practices of six major life insurers, and we published our report in September 2025.
A key concern we identified was that insurers’ were unable to provide reliable data on mental health disclosures and outcomes. None of the insurers we reviewed could tell us how often mental health disclosures led to declined cover, standard acceptance, or alternative terms beyond exclusions. Nor could they provide data on how many complaints they received about these decisions.
Without reliable and detailed data, insurers are unable to assess compliance with the Code’s mental health obligations, identify systemic issues, or make meaningful improvements to customer outcomes. This limits their ability to ensure fair and effective treatment of customers and may also undermine the actuarial data on which they based underwriting decisions.
In our Mental Health in Underwriting report, we noted that the Code requires insurers to consider each person’s individual circumstances in relation to mental health in underwriting, and to explore alternative options – such as loadings, exclusions or caps – where appropriate. However, our review found that many underwriting guidelines relied predominantly on mental health exclusions if the cover was not declined outright. This approach risks undermining the intent of the Code and the industry’s commitment to fair and considered treatment of people with a mental health history.
Furthermore, the Code prohibits insurers from applying blanket mental health exclusions to new products (clause 2.1(b)). Despite this, we identified examples that appeared to be blanket exclusions. For example:
- One insurer excluded cover in Income Protection (IP) and Total and Permanent Disability (TPD) policies for a wide range of conditions, including stress, anxiety, depression, fatigue (including chronic fatigue syndrome and fibromyalgia), psychosis, personality disorders, and psychiatric illness linked to substance use.
- Another insurer excluded cover in an IP policy for “any mental disorder”, without qualification.
- We also identified examples of accidental death cover, accidental TPD cover and accident only IP cover that denied cover if the accidental death or injury could in any way be linked to a pre-existing mental health condition.
Life CCC response to the Review of the Disability Discrimination Act. 3
One insurer advised that its use of the exclusion was consistent with its obligations under the DDA because it was based on reasonable actuarial or statistical data.
While we acknowledge this explanation, the breadth of the exclusion raises concerns about the quality and relevance of the actuarial data the insurer relied on, particularly given that most other insurers do not impose exclusions of this kind. This finding highlights the importance of ensuring that actuarial data is contemporary, robust and subject to appropriate scrutiny, so that exclusions are based on evidence and proportionate to the actual level of risk.
Conclusion
We appreciate the opportunity to contribute to this important review. Section 46 remains an important exemption for insurers, and our recommendations are intended to ensure that the discretion it provides is exercised appropriately and fairly in practice.
The breadth of this exemption emphasises the need for independent testing and validation of the actuarial data insurers rely on to confirm that it remains reasonable, based on evidence, and aligned with community expectations. Strengthening oversight in this way will help ensure the exemption is applied in the spirit intended and continues to deliver fair outcomes for consumers and the industry.
We welcome further engagement and remain committed to supporting reforms to Section 46 that uphold the rights of people with disability through fairer and more transparent insurance practices.
Yours sincerely
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Chair
Life Code Compliance Committee
Life CCC response to the Review of the Disability Discrimination Act. 4