Superannuation funds and life insurers have failed to win public support for a new industry code of conduct intended to increase consumer protections on group life policies.Peak consumer advocate CHOICE yesterday issued a damning assessment of the new code, which was developed by representatives of superannuation trustees and life insurance providers over the past 12 months.CHOICE's opposition to the code could have implications for bank-owned insurers and super funds, which are in the midst of remediating reputational damage stemming from scandals over poor financial advice and anachronistic insurance definitions. It also puts the consumer advocate on a collision course with industry super funds, which are backing the code through the Australian Institute of Superannuation Trustees.CHOICE was involved in the industry consultations but claims that important consumer protections were "stripped" from the code before it was made public on Monday."At the eleventh hour we've seen life insurers let their self-interest run rampant, creating a dud code that we cannot get behind," said CHOICE's head of campaigns and policy, Xavier O'Halloran."Super funds are under a duty to act in the best interest of members, but the extreme pressure applied by the life insurers is putting that duty under serious threat."CHOICE argues the code should require insurers to cease claiming premiums from owners of inactive and dormant superannuation accounts.Many Australian workers, who fail to consolidate their super accounts when they change jobs, continue to pay group insurance premiums to two or more insurers because most super trustees make life cover automatic for fund members.The practice means that the balances on thousands of dormant accounts are reduced to zero every year because inactive members have not instructed the trustees of their old fund to close their accounts.Despite the public furore over the new code, insurance and superannuation peak bodies yesterday described the code as a "strong step towards enhancing member interests".The industry working group was chaired by Jim Minto from the Association of Superannuation Funds of Australia (ASFA), who said automatic life insurance was valuable for Australians."It delivers enormous benefits without underwriting and must be preserved as a unique aspect of our superannuation system," he said."Coupled with this, it is very efficient in terms of the value of claims paid, relative to premiums paid."Minto said the code also provided simple and clear processes for members to opt out of automatic cover.While industry bodies are trying to advance the public interest case for implementing the code in its current form, federal financial services minister Kelly O'Dwyer indicated the code was not up to scratch."The Government is concerned that the superannuation industry has walked away from a commitment to a more robust, mandatory code of practice that had been the subject of earlier consultation," O'Dwyer said in a statement to the ABC."The government will consider an appropriate regulatory response in light of the industry's position."O'Halloran said it was clear the industry was incapable of meaningful reform."Unfortunately self-interest has hobbled the code," he said."If progress is to be made it needs to be handed over to an