A Four Corners and Fairfax Media investigation aired allegations by former CommInsure chief medical officer Dr Benjamin Koh, as well as four case studies of policyholders who claim they have been poorly treated by the insurer, with CBA chief Ian Narev subsequently apologising for the incidents.
Following these reports, South Australia-based law firm Tindall Gask Bentley (TGB) said it is acting for CommInsure claimants and investigating individual claims on behalf of clients.
“The revelations exposed in the media are deeply concerning and add to the trauma that many claimants and their families are already going through,” TGB partner Barney Gask said.
“Many have had entitlements held back, often while suffering debilitating or terminal conditions, and we are calling for swift action by the insurer to address these concerns.”
TGB added it is also urging Australians who have had claims rejected by CommInsure – particularly a TPD, trauma or life policy – and by “other insurers” to seek legal advice.
ifa’s sister publication InvestorDaily sought comment from the 10 industry funds that currently use CommInsure for their group insurance arrangements.
Care Super chief executive Julie Lander said her fund is “very concerned” about the allegations, and currently “in dialogue” with CommInsure over the matter.
“We’re very conscious about the businesses that we partner with, and that they demonstrate the right values that are aligned with ours,” Ms Lander said.
While not prompted by this week’s revelations about CommInsure, Care Super is currently undertaking a three-year review of its insurance arrangements.
QIEC Super chair Terry Burke told InvestorDaily his fund immediately raised the risk level around its insurance arrangements on Tuesday.
“We put CommInsure on notice that we would be seeking appropriate clarification and explanation,” Mr Burke said.
NGS Super executive manager of customer Dascia Bennett told InvestorDaily she was in touch with CommInsure at 10am on Saturday morning when she heard the first media report.
“[CommInsure] are in the midst of providing NGS with a full review and update on whether we have any members that are impacted in regard to these media issues and complaints,” Ms Bennett said.
“At this stage we do not have any NGS members who have come to our attention who are involved in this,” she said.
However, Ms Bennett conceded it is a “massive concern” to any fund or business partner “where you see behaviour that doesn’t meet the ethical standards and the philosophy of putting the member first”.
Kinetic Super has released a statement indicating it is taking a “proactive approach” to the Four Corners allegations.
“We are reviewing all disputed claims made in the last two years to ensure that outcomes were fair and appropriate,” said Kinetic Super.
A HESTA statement indicated the industry fund has “raised our concerns at the highest levels of CommInsure and are conducting a detailed assessment of the issues”.
“HESTA reviews the performance of our insurer and other service providers on an ongoing basis. We will continue to monitor how CommInsure are addressing these issues,” said HESTA.
Vision Super said all of its members’ TPD insurance claims denied by CommInsure were reviewed by the fund’s Benefits Committee.
“Our Benefits Committee has exercised its right to arrange independent medical advice, and a number of claims rejected by the insurer have subsequently been overturned for members,” said Vision Super.
Prime Super chief executive Lachlan Baird told InvestorDaily his fund is “very concerned” about the allegations.
CommInsure won a tender to provide group insurance to Prime Super members in January, with the arrangement set to begin on 1 May 2016.
Club Super said in a statement it is “clearly minding these revelations and as a result will be reviewing the risks associated with CommInsure at the upcoming board meeting”.
“[Club Super] expects all its service providers to uphold high levels of governance and ethical standards. Anything which falls short of this expectation will be reviewed and remedied accordingly,” said the statement.
AustSafe did not respond by InvestorDaily’s deadline.
Meanwhile, the Australian Lawyers Alliance has written to Assistant Treasurer Kelly O’Dwyer and shadow financial services and superannuation minister Jim Chalmers urging that a royal commission into the insurance sector be established to get justice for clients unfairly treated by CommInsure.
“We are calling for an inquiry with the powers of a royal commission to call witnesses, take evidence and particularly to pursue and procure key documents to uncover such poor behaviour,” Australian Lawyers Alliance national president Greg Phelps said.
“Unfortunately, we also see too many instances where insurers use definition changes, avoidance clauses and delays and disputation as a means of avoiding their responsibilities.
“There is an urgent need to review the law around insurance policies, to ensure claimants are treated fairly when they need it most – when they are faced with terminal or chronic illness,” he said.
The lobby group has also called on the MPs for a “three-part reform” in the sector, particularly for TPD claims.
These reforms would be based on identifying bad behaviour and calling it out; confirming the minimum standards that insurance policies should meet; and ensuring higher standards of behaviour in the sector.
The trustees of these union super funds have obviously failed in their duty to EXISTING members in the quest to build scale and get bigger and bigger by bringing on NEW members.
How else can you explain the decision by Australian Super to stem the flow of claims by changing the definition on TPD. An inferior definition that states you are NEVER going back to work to get paid is not in the interest of existing members. Why wouldn’t they have made it harder to get such high levels of Automatic Acceptance cover on the way in for new members?
At least the new members joining get the same crap TPD definition as existing members so that they “are in this s@#t together”
I agree Joe. The ridiculous deals that Comminsure did with the union super funds have obviously created excessive claims pressures. Getting to the bottom of those deals is a crucial element in this whole situation.
Hope the legal firms are extending their scope to include the trustees of the ISA superfunds that negotiated and organised for second rate policy conditions as cover for their members.
Would be interesting to see whether the initial engagement was based on sound protection policy conditions analysis, or the quantity of kickback and commissions the insurer paid to the fund or ISA.
All this reinforces what advisers have known and telling clients, the regulators and politicians for years – that the ISA cover is second rate and clearly not adequate, and that the public need to seek professional advice.
I have a feeling that the lid is about to come off this bucket of worms as more of these stories develop, and it is larger than the nonsensical ‘churning’ fiasco that brought in erroneous legislation.
John, I would love to know the insurer
Is not this the tip of the iceberg?!? I have a claim with a bank aligned insurer. A TPD claim been going for 3 years! Three different claims managers- requests for more tests- more reports- even mis-spelt the clients name such is there care factor.
Do not return calls when they are asked-I am making sure every one of my clients is no longer with them- no matter what the commission!
One thing that annoys me about all this is due to comminsure actions a whole host of lawyers/people as going to make money. Comminsure is going to be now spending a fortune on legals…possibly more than they would have had they actually paid out rightful claims.
But even more so, we as advisers also are now required to spend our precious time handling clients concerns and working through their concerns. Thanks for nothing comminsure. Can you let me know who I should send my bill to please.