The corporate regulator identified consumer harms and “holes in the safety net” in a report two years ago and on Monday, provided an update on how nine life insurers have addressed those concerns.
ASIC confirmed that all insurers have started reviewing restrictive TPD definitions, are working with trustees for insurance in superannuation, and have improved some claims handling practices.
“ASIC’s extensive TPD review in 2019 revealed that TPD product design and claims handling resulted in poor consumer outcomes,” ASIC deputy chair Karen Chester said.
“While all nine insurers are working to repair the TPD safety net in response to our 2019 findings, our follow up work reveals more needs to be done. Important areas for improvement remain, such as better ways to store and use data. We found that data captured by insurers is often inconsistent or not in a searchable or reportable format, limiting its usefulness.”
Ms Chester said insurers need to lift their data capabilities and invest more in their data systems to improve claims handling problems.
“While today’s report focuses on steps insurers have taken in response to ASIC’s earlier work, superannuation trustees must also engage with TPD design issues and work on lifting standards, for the benefit of their members,” she said.
“While some trustees have taken positive steps in this direction, others have more work to do.
“Of the 9 million Australians that have TPD cover most hold it through their superannuation fund. Trustees are clearly in the ‘driver’s seat’ in delivering good outcomes for their members through well designed TPD cover.
“Insurers and trustees must also act now to deliver on the improvements needed to meet the 5 October 2021 design and distribution obligations.
“In doing so, they also need to be mindful of their new obligations to act efficiently, honestly and fairly (under s912A) when handling claims and providing superannuation trustee services.”
So they have identified Super Trustee as the problem. Remember a person has to jump through the insurance definition, the Release conditions, the Trustee review, by that stage the client has given up. Underwritten advised insurance doesn’t have these problems.
By “improve” they mean “destroy”.
An NDIS study showed that after being disabled, and unable to work as a result of that disability for 12 months, then that person is 99.3% unlikely to ever work again.
If TPD does not payout after a person has been on an IP claim for 1 year or more then the TPD definition should be illegal for that policy.
ASIC’s best mates, the union funds, are the worst with TPD claims. As ASIC has never investigated the union funds I expect this will be the fault of advisers and the only solution to fix this is to cancel all insurance commissions across the board. This will ensure their mates can continue to fleece their members with junk insurance.
Realistically less people have TPD now that ASIC have implemented PYS. I’m sure this means the safety net as improved using ASIC’s logic.
Meanwhile we are in the process of diluting Income Protection definitions at the behest of APRA?
So the government wants better quality TPD? Premiums then skyrocket and people cancel…. where have I seen this before? Why not push people to get advice and a better quality policy? ohh no, we couldn’t do that due to those criminals called Financial Advisers.
Hey ASIC. Have you ever stopped to realise that insurers are FOR PROFIT organisations. Their employees are incentavised to sell watered down policies at high costs to consumers. The only people who ever cared about their clients were FINANCIAL ADVISERS. We were the only party who ever worked in our client’s best interests (we didnt need it legislated). But… im sure your campaign to remove financial advisers from the insurance industry will have a great outcome. Im sure these companies will self regulate and not gouge customers and cotinualy reduce benefits.
Policies which are NOT guaranteed renewable are a step in the right direction and im sure these intrnationally owned insurance behemouths will do what is right by their customers.
The claims people at these insurance companies are paid bonuses to limit or decline claims.
Let me reiterate that. Insurance claims staff are PAID BONUSES TO DECLINE CLAIMS. They have decline targets.
The only way to ensure that these insurers are held accountable is to have buyers advocates who are resoponsibel for the quality of the policy. Currently financial advisers (not General Advice scammers who dont have to care about the quality of the policy or whether its in the best interests of a client).
What a load of rubbish! When giving advice, do you explain how many products are out there? And do you recommend the that’s appropriate to the clients needs? Typical no care or responsibility from your end not to mention lack of understanding about how products differ. Clients get what advisers recommend either in super or outside of super. Hate to be your client that’s probably been recommended something they do understand how it works or need.