CommInsure responds to scandal by appointing experts
Date April 15, 2016
Sarah Danckert
The Commonwealth Bank's insurance arm CommInsure has appointed three independent members to its new claims review panel as part of its response to a scandal in its life insurance business. The appointments follow a joint media investigation between Fairfax Media and 4 Corners into unethical practices at CommInsure which included the testimony of a whistleblower, former chief medical officer Dr Benjamin Koh, that claims managers had pressured doctors to change their medical opinion to deny claims.
CommInsure was also caught out using out-dated definitions of heart attacks and rheumatoid arthritis to deny claims. The definitions for those two conditions have since been updated but CommInsure is only backdating the definition to claims made after May 2014. CommInsure has appointed former AMP chief legal officer and former Financial Ombudsman Service board member Chris McRae to the panel.
He will join Monash University professor Justin Malbon, a representative on the Investments, Life Insurance & Superannuation panel for FOS and a former member of the Superannuation Complaints Tribunal. Dr Stan Goldstein, who was previously head of clinical advisory at Bupa Australia, has also been appointed.
A sub-committee of the CommInsure board will monitor the outcomes of the panel. The subcommittee comprises independent non-executive directors. CommInsure's independent non-executive directors include Geoff Austin, a former CBA executive who worked at the bank in the early 2000s.
Stronger decision making
CommInsure managing director Helen Troup said the appointments of the independent panellists strengthened CommInsure's "decision making process for complex claims". Only complex claims which have been declined will be referred to the panel. Other panel members will be appointed in coming weeks.
Complex claims are generally where two doctors have differing medial opinions or where a customer has a number of different illnesses. Regarding the updating of decade-old definitions for heart attacks and rheumatoid arthritis, Ms Troup said, "Our product disclosure statements have been updated and we will also write to impacted policy holders by the end of June to tell them about the changes."
Media Release
COMMINSURE APPOINTS INDEPENDENT MEMBERS TO CLAIMS REVIEW PANEL
15 April 2016
Following commitments we made to strengthen processes in CommInsure, today we are announcing the appointment of the independent members to the new Claims Review Panel to provide an additional layer of assurance for complex claim assessment and decision-making processes.
CommInsure Managing Director, Helen Troup, announced the appointment of three panellists:
- Professor Justin Malbon, a consumer representative on the Investments, Life Insurance & Superannuation panel for the Financial Ombudsman Service, former member of the Superannuation Complaints Tribunal and professor of law at Monash University;
- Dr Stan Goldstein, medically trained and with over 30 years’ experience in health services management, including as Head of Clinical Advisory at Bupa Australia and as an Associate Professor (Conjoint) in Public Health and Community Medicine at UNSW;
- Mr Chris McRae, a board member at the Financial Ombudsman Service, and financial services lawyer with over 30 years’ experience including as a past Chief Legal Officer at AMP.
Ms Troup said: “We remain absolutely focused on doing the right thing by our customers and the appointment of these independent experts further strengthens our decision-making processes for complex claims.”
Where CommInsure’s claims committee recommends a complex life insurance claim be declined, this will be referred to the Claims Review Panel. The Panel will consist of at least two independent panel members, as well as the Managing Director of CommInsure, and will provide an independent review and assessment of each claim to provide confidence that the outcomes are fair and consistent. Other Panel members will also be appointed over coming weeks.
A sub-committee of the CommInsure Board will monitor the outcomes of the Panel. The sub-committee is comprised of independent non-executive directors.
When concerns were first raised to the CommInsure Board (The Colonial Mutual Life Assurance Society Limited), an independent review was commissioned. The Board has since sought to provide further assurance and, as previously announced in March, will be seeking to appoint a new independent expert to oversee a review program focused on past denied claims. CommInsure has been working with the Australian Securities and Investments Commission on this process and an appointment is expected to be finalised in the coming weeks.
CommInsure has begun the process to notify affected policyholders about the recent changes to the Trauma product definitions for heart attack and severe rheumatoid arthritis. These were updated on 10 March 2016 and coverage has been backdated to apply for all claim events from 11 May 2014 onwards.
“Our Product Disclosure Statements have been updated and we will also write to impacted policy holders by the end of June to tell them about the changes,” Ms Troup said.
CommInsure customers who have any questions or concerns about their CommInsure policy are encouraged to contact us directly on 1800 106 133 or 13 10 56.
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