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Address group impediments: FSC
The Financial Services Council (FSC) has sought to defend the role of life insurers and pointed to the need for the Federal Government to remove barriers impacting the effectiveness of group insurance.
In a letter responding to media criticisms of the sector, FSC chief executive, Sally Loane, on Monday pointed to significant barriers to people getting back to work after illness or accident that needed to be urgently addressed.
Pointing to regulatory settings impacting the sustainability of the group insurance sector, Loane claimed current laws actually prevented life insurers from offering targeted rehabilitation benefits to help people get back to work faster.
"These restrictions need to be removed, because the longer a person is away from work, the higher the likelihood of poorer mental and physical health culminating in a more permanent disability," she said.
"Specifically, life insurers cannot make targeted rehabilitation payments for medical treatment or therapy that they determine to be relevant, appropriate and necessary to return the claimant to work."
Loane said that if these restrictions were removed, life insurers would be able to get people back to work by offering rehabilitation benefit which would increase an injured person's probability of successful rehabilitation relative to the status quo.
"Further, there is no legislated timetable for making claims which means group insurance pricing can be impaired by the absence of a clear actuarial picture of expected future claims," she said.
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