THE corporate watchdog has cleared CommInsure of allegations its managers pressured doctors to alter medical opinions so it could deny insurance claims but says some of its practices were “clearly out of step with community expectations”.
The Australian Securities and Investments Commission said on Thursday the outdated medical definitions the Commonwealth Bank-owned insurer used to determine heart attack and severe rheumatoid arthritis claims were not illegal but risked customers not getting the cover they expected.
ASIC said CommInsure has agreed to apply its updated heart attack definition back to October 2012 and will now start identifying affected consumers and making payments where appropriate.
In its long-awaited report into allegations of deliberately denied or delayed claims, ASIC said it had identified areas where CommInsure needs to improve its claims handling processes.
The regulator said it had found “no evidence to support allegations that CommInsure claims managers applied undue pressure on doctors to change or alter their medical opinions”.
It said it will work with Comminsure to ensure better communications with consumers as well as improved training and assistance for claims managers. An independent expert will assess the insurer in mid-2018.
ASIC reviewed 60,000 documents following the allegations by CommInsure’s former chief medical officer, Dr Benjamin Koh, and said it still has work to do on the case.
“ASIC is continuing to investigate concerns that CommInsure’s advertising and promotion of life insurance policies to consumers contained potentially misleading or deceptive information in the period before March 2016,” ASIC said in a statement.
“We will provide a further update on this aspect of our investigation when appropriate.”
• WHAT DID COMMINSURE DO WRONG? The corporate watchdog has found the Commonwealth Bank-owned insurer used outdated medical definitions for heart attacks and rheumatoid arthritis in assessing claims — a practice that resulted in the refusal of claims by seriously ill customers. It was not illegal but the Australian Securities and Investments Commission said its practices were “clearly out of step with community expectations”.
• HOW DO WE KNOW ABOUT IT? CommInsure’s former chief medical officer filed an unfair dismissal claim in which he said he was fired in August 2015 for whistleblowing. Dr Benjamin Koh claimed that CommInsure used the definitions to deliberately deny legitimate claims and delay others to minimise potential payouts. A joint investigation by Fairfax Media and the ABC’s Four Corners program highlighted affected customers.
• HOW DID COMMINSURE RESPOND? Commonwealth Bank maintained Dr Koh was dismissed for sending confidential material to his personal email account, but chief executive Ian Narev did say he was “saddened and disappointed by the handling” of some cases.
• WHAT HAPPENED NEXT? Mr Narev invited CommInsure customers to ask for their cases to be reviewed and commissioned Deloitte to conduct an independent review, which cleared the bank of systemic failings.
• WHO CARRIED THE CAN? Mr Narev had told a parliamentary committee that no senior executives had been sacked over the matter.
• WHAT DID ASIC DO? ASIC examined 60,000 documents, interviewed staff, reviewed client files and obtained independent medical advice before calling out the outdated definitions. ASIC’s investigation did not extend to concerns raised about treatment of whistleblowers.
• WHAT HAPPENS NEXT? ASIC will work with Comminsure to ensure better communications with consumers as well as improved training and assistance for claims managers. It has asked for an independent expert to assess the insurer in mid-2018, and said it is still examining CommInsure’s advertising and promotion policies over concerns they were misleading or deceptive.