In a statement responding to Fairfax Media reports that pointed to the poor handling of claims – particularly relating to heart attacks – Mr Narev said insurers have a responsibility to deal with claims as sensitively, quickly and fairly as possible.
“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.
“I am saddened and disappointed by the handling of these cases. I will personally write to the customers concerned to apologise and offer to meet with them face to face.”
Mr Narev said in these particular cases the bank was “focused too much on process rather than people”.
“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,” he said.
“Here, we got that balance wrong. We focused on details which caused delays at critical times for customers that needed help.”
Mr Narev added that people are encouraged to escalate concerns or difficult decisions, but highlighted that it “appears” this 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.”
He added: “We are deeply committed to being an ethical business. We will do our utmost to maintain the highest standards and avoid mistakes. But as we have said before, being ethical does not mean being perfect. So an important part of being ethical is responding the right way to mistakes. If we do make a mistake, we will apologise and put it right.”
Let’s not throw the baby out with the bath water. The more criticism we heap on the likes of CommInsure without ALL the facts and specific details we put our whole industry at risk of being tarnished with the same brush. In 30 years as an adviser I admit I have not written a risk policy with CommInsure [or Colonial or any of its previous entities]. Since hearing the 2mg or greater Troponin condition being part of the CommInsure Trauma policy definition; and a major reason for denial of the original heart attack claim; I was dismayed when I looked at several other CURRENT life office policy contract definitions for heart attack – only to find the very same supposedly “out of date” diagnosis for myocardial infarct episodes present in their wording. So all you people keen to take the moral high ground, go check the policy wordings of the life offices you use first, before jumping on the bandwagon of criticism. All of this said, I fully agree with the sentiment that the vertically integrated [i.e. bank owned life offices] will potentially be the ruin of this industry. I can only hope CBA, Westpac and ANZ follow NAB’s example and sell their majority interest in an industry that requires the consumer’s interests to be put forward as the sole priority. Risk insurance is not a term deposit or savings account product. It requires decades of experience and a wealth of knowledge to act in the very best interests of your clients, something the banks will never understand. E.g. try talking to the same business banker for more than 1 year in a row…I’ve had 3 different ones in 5 years with and now I have none…which bank?
I haven’t watched the entire interview and I’m sure there is some fire there in the smoke but the specific conversation regarding heart attacks was a little one sided. The insurer has the right to price and define a condition and the reality is that a definition with the requirement for troponin levels above a specific threshold presents a lower risk of claim and therefore a lower price point for the insured. The best heart attack definitions in the market also carry about a 5% price increase which has to be factored in. Now of course I (and many other) advisers would be happy that the client pays an extra 5% for the certainty but it’s not unreasonable for an insurer to require a certain level of severity before paying a claim. “Heart attack” is a great headline catcher but people can have infractions and be back at work within days with almost no long term impact. I don’t think the contracts were designed to create fairly obvious windfalls just because a condition is terrifying. I’ll sum it up with the quote that now hangs in my office: “There are no good or bad insurance policies – just the advice that comes with them”.
How can you seriously sing the praises of a morally bankrupt organisation like the CBA
Thanks to CBA the financial planning industry reputation has been destroyed with the public, media and the politicians.
CBA states publically it wants to be “The Ethical Bank”
The CMO Dr Koh exposed many of the concerns to CBA management and they did nothing but sack him. This is the Comminsure chief medical officer. The 7.30 report made distressing viewing. How can the “Ethical bank” act in such a despicable way. Why did claims managers pressure treating doctors to change their medical reports. Deleting reports and modifying client information. How can this be happening after the enormous damage caused by financial planning scandal where CBA said things were going to change
The CBA has been exposed for Comminsure scandal and the CBA financial planning scandal. What other scandals will be next?
No one is held accountable. One of the managers responsible for CBA financial planning scandal was asked to resign and told they would be given a good reference
even though because of this cba manager under their directive cost clients millions of dollars only to transfer to Westpac and holds a leadership position to this day.
There is no accountability.
Ian Narev we expected better
As advisers you can make a difference but how can you recommend comminsure when there are doubts they will honour valid claims. How are you following the ” act in clients best interest” provision by using comminsure. How can you give your clients and their families peace of mind knowing how comminsure conducts itself.
I am astounded that no-one has stood up for Comminsure.
I have been in the risk and financial planning business for 49 years, 28 years in Australia.
I have dealt with the “Group” (Legal and General, Prudential, Colonial and now Comminsure for all of this time (49 years if I include South Africa). I have also dealt with many others.
In all of my time and dealings with Comminsure I have never had a genuine claim refused. I have had some terminal illness claims paid within 3 days of confirmed diagnosis.
I can understand Comminsure’s care when considering dealing via the media. They are one of the only companies that backdate their benefits for all insured when they make a change. Its easy for other insurers to make an exception or an adjustment to a contract when they do not have a commitment to all of their existing policy holders.
Comminsure are also one of the few insurers that offer true level premiums, if you understand that term.
On numerous occasions I have written to the Comminsure management and staff to thank them for their personal and passionate attention to my clients’ needs.
I understand that some advisers and clients are considering moving their clients to new insurers : take care of the recent June 2014 legislation changes. You may find that you are prejudicing your clients’ positions. Some-one will also point a finger at you for making a few extra dollars for your work.
One thing that also amazes me is that the press and journalists always speak to all the unhappy costumers. I suggest that you journalists take a trip down to any cemetery and see if you can get a few of the happy customers to comment. I reckon you will get a different view.
It is also unfair to ask one insurer to pay to fix the entire industry.
once again it is the banks destroying the industry in their hunt for even greater profits. They are clearly morally bankrupt and will stop at nothing, eg “churners”, humph!! Any adviser worth their salt should seriously be considering Comminsure as a product provider
Another major scandal which makes the comminsure scandal look insignificant is the way industry funds conduct their insurance activities. They can change insurance definitions rendering once eligible insurance policy holders with a claimable event under one of their insurance providers not valid to claim as they have changed insurance providers to the fund. This has disadvantaged millions on Australians whom think they are covered by insurance only to discover they have no coverage.
There needs to be an urgent enquiry as this practice by industry funds is causing severe financial hardship and making 1000s homeless. Where is ASIC and APRA? Asleep at the wheel again. How many more families need to suffer before they do their job. If past guidance can be used as a guide for ASIC they took 18 months to do anything . This will mean 1000s more families will suffer.
As life advisers please pay particular attention to insurance policies and their definitions held through industry funds. You not only will be able to help your clients and give them peace of mind you will be helping address the underinsurance epidemic in australia
The only way to teach greedy companies whom do not care about their policy holders is for consumers to boycott them. Only the dollar matters to them. Insurance is critical and with a massive under insurance problem companies like comminsure and their behaviour contribute to the under insurance epidemic in Australia. I wonder what they will do at CBA? Establish a bogus review scheme like their financial advice review with predetermined outcomes but use it as a case of window dressing to the public to give the impression to the public that they are good corporate citizens. Where was ASIC? Where was APRA? Both reactive organisations instead of being proactive. They have been a dismal failure. Both should be abolished and a new proactive organisation should be established with competent staff. Due to ineffective regulators and enforcers we are just at the tip of the ice berg of financial issues that will continue to emerge. No management will be held accountable and some excuse will be made. to protect management. What excuse will it be this time? Lack of education? The excuse used with the CBA financial advice scandal. All CBA financial planners need to be degree qualified but the sales pressures remain in effect the same flawed model is retained and the same problems will re emerge.
Risk advisers need to put a strong emphasis on claims experience and handling and not recommend companies like comminsure after their disgraceful claims handling so they do the right thing by their clients and restore confidence in the advice and insurance industry and reward insurers whom do the right thing and punish insurers whom do the wrong thing in the only language they can understand in the hip pocket.
CommInsure and all its senior management need to be investigated and put on trial. From the state managers up, every state and every executive manager should have their bonus’s from the past reviewed and past rejected claims reviewed. I’ll bet you will see a correlation of rejected numbers vs size of bonus payments. The dodgy financial planning perception is continuing to be well fed by an industry that still rapes and pillages its way to profit.
If I had no knowledge of this industry like most clients, I would simply cancel my insurance policies in disgust.
I am sure not even David Murray would have discriminated against an employee of the Bank who had a mental Health problem of some significance. I applaud Geoff Kennett for taking aim at the CBA today and I notice how they settled with the gentleman rapidly when it became public. Still it seems that someone has given the instructions that Ian Negrev the CEO has to deal with the deserved public condemnation that is coming.
This is the third case of Bankers running life insurance companies where they cut the costs (to increase their bonuses) at the expense of policyholders by any means possible. Do not pay the claims under any circumstances if at all possible.
Someone in the bank told the Claims people at Comminsure to do this and now they can watch the cash flows crash on Comminsure, as people cancel what they believe to be (after 4 corners this evening) worthless policies. Now who is to blame for this – the CEO of the Commonwealth Bank as he is responsible. They cannot even accept the basic definition of a mental Health claim. Bankers in charge of Life Insurance companies and we have MLC and recently Asteron – Suncorp and now Comminsure.
It is time APRA ran an investigation into the products offered by the bank owned Life companies and investigated instructions given to the Claims Departments by the Bankers.
It’s good to see you are saddened and disappointed by the behaviour of CommInsure but fair shake of the sauce bottle it’s not all your fault! I mean, after all, David Murray had 13 years at the helm before he moved on to head up the Financial Services Inquiry!!! (Tongue firmly planted in cheek!)