CBA CEO saddened by life insurance 'mistakes'

The chief executive of the Commonwealth Bank of Australia, Ian Narev, conceded in a statement over the weekend that the bank had failed to "meet its responsibility" when examining its clients' life insurance claims.

In response to Fairfax Media reports which uncovered errors in the handling of claims, particularly relating to heart attacks, the CBA said it did not address the needs of some customers in a fair or sensitive way.

"It is clear that in relation to the customers who have been the subject of recent media enquiries, we failed to meet that responsibility," he said.

"In these cases we focused too much on process rather than people. By their nature, life insurance policies can be complex. Claims processes involve the review and assessment of detailed documentation. Whilst thoroughness is important for the integrity of the system, this must be balanced by customer need and dignity."

Mr Narev said he would write personally to clients who had had their claims mishandled and offer to meet them face to face.

"I am saddened and disappointed by the handling of these cases," he said.

However, Mr Narev emphasised that evidence showed that in a vast majority of cases, the right outcomes for customers were reached in the right way.

"In 2015, CommInsure paid more than $850 million of life and income protection payments to 22,000 people and their families," he said.

Mr Narev conceded the bank had "wronged" some of its clients at critical times and was moving to resolve the delays.

"As part of our relentless focus on values at Commonwealth Bank, people are encouraged to escalate concerns or difficult decisions. Here it appears that did not happen. These customers felt frustrated and let down by CommInsure, and believed they were more likely to have their voices heard by speaking to people outside Commonwealth Bank," he said.

"Having had these cases brought to the attention of senior management within the last few days, we have acted on unresolved matters."

Mr Narev urged customers to contact the bank directly to discuss their cases further.

Fairfax Media reported this morning that ASIC will investigate CBA's failing to pay claims since the definition of 'heart attack' the bank was using was "outdated".

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+1 #15 Joe 2016-03-09 13:56
Well said OTF

Biased reporting of the facts, rather than the ISA being the fall guy, we are - again!
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+4 #14 OTF 2016-03-09 11:11
Our business has had many claims paid out without any problems by many different insurers including Comminsure. Could it be that when a policy is put in place by an adviser, it is the right policy with the right terms and with less chance of non disclosure and hence better claims payout experience?

Why were the industry super fund clients in the Four Corners program holding up Comminsure brochures instead of Hesta and Care Super brochures? Why did the industry fund people not fight on behalf of their clients with the insurer like we advisers do for our clients? And what happens when there are claims on the directly sold insurance policies that are not paid even maybe for legitimate reasons? People do not read the PDSs and then are shocked when the policy does not pay out. All advisers know the shortcomings of many insurance contracts in super - clients don't.
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+3 #13 CBA make me sick 2016-03-09 10:25
Saddened, he should be physically sick about the pain he has caused these " Customers"

Maybe stop calling them customers too Ian..

Just another banker that looks at everything as a number.

Could care less about people if it gets in the way of profit.
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+4 #12 Gav 2016-03-09 10:20
Two points:
This sorry saga is proof that having an adviser leads to claims being paid out. Being unadvised leads to issues.
Second point, bought a client base, discovered during review that a client could have climed on their trauma policy 8 years before and hadn't. CommInsure paid the claim and paid back 8 years of policy premiums.
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+5 #11 reality check 2016-03-09 09:42
Quoting Kafantaris:
No, you're not in good hands with insurance companies. You're in their hands. But you're not entirely helpless. Stop talking to them and get a lawyer that knows how to sue them.


No. Don't do that. why give away half your benefit to a "no win no fee" lawyer? Why not use your adviser to do it? This is the worst suggestion here...way to go to drive up prices.
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0 #10 Dave 2016-03-08 15:23
Risky Business
respect your statement, it would be a sad sad day if all claims were unsettled. having said that my statement still stands, all comminsure claims I have been involved with end up being protracted. All other providers just pay when the boxes are ticked. Oils aint oils and insurers fit that bill as well.
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+1 #9 Risky Business 2016-03-07 22:23
Quoting Dave:
Mr Narev
You will be "saddened"a great deal more when and IF you have a good look at the problem. This is NOT a recent problem and like a great deal of advisers out there will tell you- if you ask-a great deal of claims result if a protracted process to establish a claim. You may then realise a large number of advisers don't touch your product. Harsh statement but a reality that has a great deal of fact. Another reason for a full enquiry to occur


Sorry Dave, but I really can't agree. Some of my best claims experiences have been for clients insured with CommInsure. I'm not denying that the couple of stories I've read so far don't sound good, but then, I hardly think the reporting is unbiased. Walkley anyone?!
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0 #8 adrian 2016-03-07 19:30
Saddened by his companies mistakes.

Ian has had a few issues raise their ugly head in the Bank in the last few months.

Kind regards,

Adrian Totolos.
IT Consultant.
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-1 #7 Kafantaris 2016-03-07 16:48
Insurance companies have a duty to handle claims in good faith. When they don't -- more often than you'd think -- they can be held liable for damages -- including exemplary damages for their callousness. No, you're not in good hands with insurance companies. You're in their hands. But you're not entirely helpless. Stop talking to them and get a lawyer that knows how to sue them.
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+6 #6 George 2016-03-07 12:34
Yeah right!! I am sure he stays up at nights pacing the floor and crying!

How much more damage can the CBA due to their brand? I have never seen an Australian bank with so many back to back scandals in so many different arms of the bank.
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+5 #5 Nobby Kleinman 2016-03-07 10:29
Profits above everything else. The wording on a policy stands and claims are rejected based on terminology. That's just legalities.
Getting caught out and apologising is like Pells saying he should have done more at the time but the church is not at fault.
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+5 #4 John Edwards 2016-03-07 10:14
How much more damage can the banks do to the reputation of the whole industry. Businesses should live and die by their service to customers. Propping up the banks and their cosy oligopoly has to stop.
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+3 #3 Adam P 2016-03-07 10:14
Shows just how much Life Insurance companies can try to not pay legitimate claims.
And the LIF Bill will allow the Big Banks and Life Institutions to flog more TV, Internet and Phone based Life insurance that has a failure rate of over 50% at time of claim.
How much more bank / insurance profit do they want whilst they completely dud mum and dad consumers.
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+2 #2 Dave 2016-03-07 10:11
Mr Narev
You will be "saddened"a great deal more when and IF you have a good look at the problem. This is NOT a recent problem and like a great deal of advisers out there will tell you- if you ask-a great deal of claims result if a protracted process to establish a claim. You may then realise a large number of advisers don't touch your product. Harsh statement but a reality that has a great deal of fact. Another reason for a full enquiry to occur
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+4 #1 RT 2016-03-07 09:46
Yet another example of an institution making life difficult for advisers. The instos influence advisers at best and control them at worst all for their balance sheet. They do it by product design and management, conflicted pricing and service, recruitment incentives, tactical advisory business ownership and a score of other ways.
At the end of the day it is always the advisers that pay the consequences. And let's not forget that if the into can find a way to put the blame on the advisers they will do it with vigor.
Sure we still have advisers that are product floggers, churners, not sufficiently on top of the best product or strategy for a client, take the easiest way to the highest commission and we need those advisers out hence why I support initiatives like LIF. BUT why must the good advisers still have to wear the inefficiencies and arguably immoral actions of institutions?
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