AFA and FPA rebuke Industry Super claims
Both the AFA and the FPA have hit out against Industry Super Australia (ISA) for unfairly connecting advisers and commissions as contributors to the alleged unethical behaviour within CommInsure's claims management team.
As previously reported by Risk Adviser's sister publication ifa, ISA chief executive David Whiteley connected allegations of poor and unethical conduct within CommInsure to advisers and commissions.
In response to Mr Whiteley's comments, AFA chief executive Brad Fox said it is "unreasonable" to place blame "where it does not belong".
“To link insurance claims decisions to the remuneration paid to an adviser is like blaming a petrol station for a driver who chooses to speed. The two are unrelated and it is nonsense to try and connect them.”
Mr Fox also highlighted that the stories reported by Four Corners and Fairfax Media involve consumers who did not have an adviser.
“These stories, in fact, highlight the value of arranging life insurance through a financial adviser who can identify life insurance needs, help put appropriate insurance in place and who then becomes their client’s advocate at claims time," he said.
FPA chief executive Dante De Gori said he is "completely devastated" that consumers had been put through that process with CommInsure and added that these concerns do not involve financial planners.
"There has been a little bit of discussion trying to link this to financial planning and that is unfortunate. These particular incidents are directly related to the contracts and the products, policy conditions and the processes around claims management," he said.
"This issue that has been raised by the investigation is about the practices of insurers. It is not and does not relate to practices and behaviour of financial planners.
"The irony of all this is that, of course, financial planners can and do play a big role for consumers in the policies that are recommended and that are appropriate and that the sums insured are appropriate but also in the support around claims management."
Advisers are an important partner to clients going through a risk insurance claim, according to Mr Fox.
In a separate statement, Mr Fox also said there is “no one else” that offers the service that advisers do when it comes to insurance claims.
“Advisers know the life insurance needs of Australians better than anyone else, including the need for a more supported claims experience and a better end result,” he said.
Mr Fox also highlighted that Australians can be in the dark over how much insurance cover they have, if any, but when they engage with an adviser who considers their personal needs, it becomes much clearer.
“Gaps in life insurance coverage are common, as Australians move through life stages and either do not get the cover they need to meet their change in personal circumstances, or do not understand what the cover they have will actually entitle them to in the event of illness or accident.”
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