AFCA is the free external dispute resolution scheme for consumer complaints about life insurers; it can make decisions binding on the insurer up to a stated monetary limit. Complaints go to the insurer's Internal Dispute Resolution (IDR) team first; AFCA accepts the matter if it is unresolved after the IDR timeframe.
AFCA was established by the Treasury Laws Amendment (Putting Consumers First, Establishment of the Australian Financial Complaints Authority) Act 2018 and started operating on 1 November 2018, consolidating the prior Financial Ombudsman Service (FOS), Credit and Investments Ombudsman (CIO), and Superannuation Complaints Tribunal (SCT) into a single scheme. All Australian Financial Services Licence (AFSL) holders, including all 9 panel insurers, are members.
When you can use AFCA for a Life Cover dispute
AFCA accepts complaints across the lifecycle of a Life Cover policy:
- A claim has been declined or partially paid
- A claim has been delayed beyond LICOP's stated timeframes
- Cover has been cancelled or treated as if it had never been entered into following an alleged breach of the duty to take reasonable care
- A premium increase is disputed
- A definition (terminal illness, dependant, beneficiary) has been applied in a way the complainant says is wrong
- The insurer has not complied with the Life Insurance Code of Practice 2019
AFCA does not handle complaints that are still pending the insurer's IDR response (subject to IDR timeframes below) or complaints already determined by a court.
The IDR step before AFCA
Under ASIC Regulatory Guide 271 (Internal dispute resolution) and the Life Insurance Code of Practice 2019, panel insurers must:
- Acknowledge a complaint within 1 business day where practicable
- Provide a final IDR response within 30 calendar days for general complaints
- Provide a final IDR response within 45 calendar days for claim-related complaints
Where the insurer has not responded within those timeframes, or has responded but the complainant remains dissatisfied, the complainant can lodge with AFCA.
How to lodge with AFCA
- Submit the complaint online at afca.org.au, by phone on 1800 931 678, by email at info@afca.org.au, or by post to GPO Box 3, Melbourne VIC 3001.
- Provide the policy schedule, claim documentation, IDR correspondence, and a clear statement of the outcome you are seeking.
- AFCA contacts the insurer and tries to facilitate a negotiated resolution (most complaints resolve at this stage).
- If negotiation fails, AFCA conducts a formal investigation and issues a determination.
- If the complainant accepts the determination, it is binding on the insurer up to the monetary limits; if rejected, the complainant retains the right to pursue the matter in court.
Monetary limits AFCA can award
AFCA monetary limits are set in the AFCA Rules and reviewed periodically. For life insurance complaints lodged from 1 January 2025, the cap on AFCA-awarded compensation is published on afca.org.au and is currently in the range of $1.085 million per claim for most life insurance disputes. Beyond the AFCA cap, the complainant can pursue court action. Where the insurer accepts the AFCA determination, the binding outcome includes any direction to pay, vary the policy, or correct the conduct.
For superannuation-related complaints (where the Life Cover is held through a regulated super fund and the dispute concerns the trustee's decision), AFCA can apply a different jurisdictional framework under Part 7.10A of the Corporations Act 2001. AFCA superannuation determinations are binding on both parties subject to limited rights of appeal to the Federal Court on questions of law.
What AFCA looks at when reviewing a Life Cover dispute
- The contract terms in the PDS and Policy Schedule
- Any application disclosures and whether the duty to take reasonable care was met
- The insurer's conduct against the Life Insurance Code of Practice 2019
- The Insurance Contracts Act 1984, particularly ss20B, 28, 29, and 54
- The Life Insurance Act 1995
- Common law contract principles (interpretation of ambiguous wording typically favours the insured)
What AFCA does not do
- Provide legal advice (it is an independent dispute resolution scheme, not a legal adviser)
- Award general damages or punitive damages beyond stated compensation categories
- Reverse contract terms that were properly disclosed and agreed at application
- Handle complaints from commercial businesses with turnover above stated thresholds (AFCA has separate small-business jurisdiction)
Common considerations
- Lodge the IDR complaint in writing so the 30 or 45-day clock is clearly documented.
- Keep the policy schedule, application documents, claim form, and all correspondence in one folder.
- AFCA can investigate even where the complainant has not used a lawyer; legal representation is permitted but not required.
- AFCA is free for complainants. Insurers pay levies and per-case fees that fund the scheme.
- AFCA publishes determinations on its website (with personal details redacted), which can help understand how similar Life Cover disputes have been treated.
Regulator anchor
- AFCA Rules (current version published at afca.org.au)
- ASIC RG 271 (Internal dispute resolution)
- Life Insurance Code of Practice 2019 (claims-handling and complaints sections)
- Insurance Contracts Act 1984 (Cth) and Life Insurance Act 1995 (Cth) for the substantive contractual rights
- Treasury Laws Amendment (Putting Consumers First, Establishment of the Australian Financial Complaints Authority) Act 2018