Speaking to the media yesterday, ASIC deputy chair Peter Kell said determining if there were any breaches of the law was the primary objective of its investigation.
“If you look at ASIC’s industry-wide report on insurance claims handling that we released late last year, it set out more than 20 consumer case studies in that report,” Mr Kell said.
“We speak directly to consumers on a very regular basis, but it’s not unusual as part of the formal investigation that there isn’t a requirement for consumers to be interviewed, and we make that decision based on the facts before us and the nature of the allegations and the relevant law.”
Mr Kell noted in ASIC’s investigation of its ruling that having out-of-date medical definitions is not against the law.
In addition, he said ASIC is calling for the removal of legal exemptions that currently exist around claims handling within the life insurance industry.
Mr Kell said claims handling is specifically excluded from financial services consumer protection law under the Corporations Act, and that this also stretches to consumer experiences of a claim.
“The government has agreed to look at law reform for life insurance claims,” he said.
“As we have set out very clearly in relation to this matter in our report and more broadly for the industry, the legal exemptions that this industry currently enjoys for claims handling, in ASIC’s view, should be removed.”
In response to the findings, CommInsure said in a statement that ASIC’s report established that various improvements have been made in its business over the past year.
“We will be examining the findings closely as we always know we can do more to enhance the customer experience,” CommInsure said.
“We recognise the industry is evolving and we expect, and will advocate for, further industry reform to make life insurance simpler and better for customers.”
another big bank cover up-
Yep those who are wondering why we need a royal commission? this is exactly why! bring it on this is disgusting that witnesses are not being interviewed. that is where the evidence lays!
Really noel? the evidence lays with clients? I had a client, reasonably smart guy, works in finance, took out life & TPD with me, refused trauma. Has a heart attack, wants to claim on his policy. Heart attack isnt covered. Said that’s what was in the trauma policy i’d recommended. Didnt stop client from complaining about insurance companies not paying.
Same as with the Brisbane floods, people just assume that they are covered and when they find out they’re exposed they moan and try and force the government to have flood included in all policies. So that people who dont need flood cover subsidise the premiums of people who choose to buy/build in flood prone areas. The upshot is that ordinary people dont know jack when it comes to their insurances and what they are covered for and more importantly, what they’re not.
Good point Jimmy. Of course nobody wants to see legitimate insurance claims denied. But a lot of insurance complaints are from people who didn’t insure themselves properly, then expect others to give them a handout. The classic case is those who don’t bother to get IP or Trauma, then try to claim on the default TPD in their super for issues that are not permanent disability. (Or even worse, try to claim on the terminal illness benefit in their default death cover, for health issues that are recoverable.)
When insurers do give in to dubious claims like these to avoid PR blackmail, it’s other policy holders who foot the bill through higher premiums.
fact the ASIC never acts on a consumer concern and this confirms there is distinct line drawn between the financial industry with the big end of town boys to that of the consumer.Bring on the independent adviser that the consumer needs rather than the product flogging by the banks
Unbelievable – ASIC not interviewing the CBA victims, ASIC asleep at the wheel again
dear Ross, once they leave the confines of their little bubbles at ASIC they have to get a job someplace else. it’s normally with the big banks or insurers. everyone knows what’s going on. it just goes around in circles. big banks making a mockery of the system and everyone else pays for it with endless compliance. what a farce