The Australian Securities and Investments Commission (ASIC) will deliver findings on its investigation into CommInsure by the end of March, according to ASIC’s deputy chair Peter Kell.
Speaking at Money Management’s Life Insurance Claims Handling breakfast today, Kell said it was a “substantial piece of work [by ASIC],” which examined 60,000 separate documents as part of the review.
Kell said ASIC was also presently undertaking its 2017 life insurance industry review to specifically identify “systemic concerns or issues with the claims handling process”.
As part of the review process, ASIC analysed 5,000 unique life insurance dispute records sourced from the Financial Ombudsman Service (FOS) and the Superannuation Complaints Tribunal (SCT), and incongruities in claims data for outcome rates.
Kell said while the 2016 report did not find any evidence of a broken system and that 90 per cent of the claims were paid in the first instance, there was nevertheless room for improvement.
Kell said there were concerns on the rate of declined claims as they varied considerably between organisations. The highest decline rates recorded were for total permanent disability (TPD) and trauma cover.
“We also found that there were different experiences across different distribution channels,” he said. “There were higher decline rates for life policies sold direct to consumer – that is, outside the advice channel – compared to policies sold through financial advisers or through the super channel.”
Direct-to-consumer policies had an average 12 per cent decline rate against the eight and seven per cent rates for policies sold through advisers and superannuation channels, Kell said.
