Insurance companies and the way some of them handle claims are more responsible for the problems confronting the group insurance industry than do lawyers, according to a leading plaintiff law firm, Maurice Blackburn.
Responding to suggestions that high levels of lawyer activity had undermined the viability of the Total and Permanent Disability (TPD) insurance regime, Maurice Blackburn principal, Peter Koutsoukis has written in a column for Super Review that he rejects such suggestions.
Instead, he points to the claims handling processes of the major insurers, particularly those servicing retail funds, to suggest that superannuation fund members who seek to make claims are being put through the “wringer”.
“Obviously not all group insurers are the same, and not every claimant is put through the wringer, but there are at least a dozen insurers, in particular retail funds, whose conduct is well short of reasonable when processing claims,” Koutsoukis writes.
His comments have come little more than a week out from a Super Review breakfast which will openly question what has gone wrong with the TPD regime and the role of lawyers.
“Industry leaders have recently been complaining about the claims process being disrupted and made more complicated by the actions of lawyers. I wholeheartedly reject this argument,” Koutsoukis wrote.
“One only needs to look at what the Australian Prudential Regulatory Authority [APRA] has been saying about the industry to see that it needs to get its own house in order before pointing the finger at advocates who provide legal help to injured and sick people struggling to deal with a complex claims process and hostile insurance industry.”
Koutsoukis has suggested in his column that a code of conduct for claims management, similar to that used in other areas of insurance would be a good start towards addressing the problems of the group life/risk sector.
“Law firms who work in superannuation are keen to discuss a Code of Conduct with super funds and insurers to improve [the] conduct of all industry participants,” he wrote.
Koutsoukis is correct, I have come across at least a dozen funds that at best are toxic to their claimants and quite frankly under handed. Take for example a client who went to appeal and the insurer bullied the claimant to see one of there so called ime , the funds was then under investigation by APRA and the claimants specialist was giving expert evidence against the ime to APRA. Now how is that reasonable
This could be sorted easily if APRA was to require all members wishing to make an insurance claim to have their claim initially assessed by their fund within a mandatory period, such as 90 days as is the case for a formal complaint. The fund would need to provide the member with clear, plain-English, reasons for any ongoing assessment requirement beyond that time that they can, if they wish, take to a lawyer who could then seek to impose themselves IF warranted. This would at least provide the ‘no-brainer’ cases with a timely and transparent resolution without unnecessary legal process and fees.
This Koutsoukis bloke seems to not know the difference between funds and insurers. It would be nice for all of us if he understood the issues before commenting. Embarrassing to say the least!