The Australian Institute of Superannuation Trustees (AIST) has welcomed the corporate regulator’s commitment to further investigate the variation in declined total and permanent disability (TPD) claims.
The Australian Securities and Investment Commission’s (ASIC’s) report into the life insurance sector of claims handling found life insurers identified the variation in declined claims among insurers for TPD were seven to 37 per cent.
AIST chief executive, Tom Garcia, said: “Insurance is a very complex product, arguably more so than superannuation”.
“There are many factors involved in the claims handling process so it’s vital that we have a better understanding of the underlying drivers behind such apparent inconsistencies,” he said.
“Where members are not getting value from their insurance, or worse, not getting pay outs that they are entitled to, this must be addressed.”
Garcia also welcomed ASIC’s recommendations to establish a new public reporting process with the Australian Prudential Regulation Authority (APRA) and to strengthen the dispute resolution framework about insurance.
He noted the Government’s decision to introduce caps on commissions for financial advisers selling life insurance outside super was also a move in the right direction.
“Wherever insurance is sold, consumers have a right to expect that the way it is sold and the way the claims experience is handled meets best practice standards,” Garcia said.
