According to CALI, this action plan is aimed at supporting the long-term affordability and industry sustainability when it comes to mental health in life insurance, creating greater “clarity, fairness and transparency for customers”.
As it stands, mental health total permanent disability claims represent the largest share of claims paid across many insurers. Moreover, some within the industry have stated that mental health underwriting practices are too rigid and do not treat customers who disclose mental ill health fairly.
CALI said that with consultation of the life insurance industry, medical and workplace experts, a new assessment framework will be developed for mental health claims over the next 12 months.
“This work is part of an industry-wide effort to better align disability insurance cover with contemporary medical evidence and return-to-work practices,” it said.
CALI chief executive Christine Cupitt said life insurers have a responsibility to act on the growing mental health crisis, and the new framework will bring greater consistency across the industry.
“We have listened to feedback from customers and consumer advocates who feel the claims process can be more transparent and easier to understand,” she said.
“Our goal is to ensure an experience that is fair, transparent and consistent for every Australian, no matter which insurer a customer turns to.”
She also emphasised that while life insurers will “always be there” for those who need the help most, clarity is needed about the role they play.
“Australia is in the middle of a national mental health crisis and we need to set clear, evidence-based guidance about the support life insurers provide,” she said.
“Insurers will always be there to help Australians with severe conditions that prevent them from working, but like the NDIS or workers’ compensation schemes, we can’t be the answer for every case.”
CALI said it would establish a panel of experts to provide technical advice on the framework. This panel will include medical practitioners, legal specialists, rehabilitation and return-to-work experts, life insurance practitioners, and people with lived experience.
The new framework will be informed by the upcoming paper being released regarding findings on the independent Life Insurance Code of Practice (Life Code) led by Peter Kell.
“Together, the Life Code review and the development of a new disability assessment framework will strengthen how Australians are supported when facing mental health challenges and give Australians confidence that life insurance will be there when they need it most,” Cupitt said.
They could start with the financial advisers they have driven to the brink with the LIF changes.
AMEN to that brother! So much wrought on advisers and consumers that has gone uncontested and unpunished. Little justice and much harm in any outcome from the govt or life companies. So much for ‘client best interest’ – the govt and life companies truly showed us what marketing fluff THAT little gem was.