ASIC releases findings from CommInsure investigation
ASIC investigation reveals CommInsure shortfalls, but no wrongdoing.
The Australian Securities and Investment Commission (ASIC) has released the results of its investigation into CommInsure life insurance, sold under the name of The Colonial Mutual Life Assurance Society Limited.
The report thus far reveals several distinct areas of improvement that CommInsure is promptly acting on, including paying out old claims in line with the updates, but there is no evidence of any wrongdoing, deliberate deception or deliberate attempts to unreasonably reject claims.
The investigation so far
After reviewing more than 60,000 documents, interviewing staff, reviewing the outcomes of previous disputes and obtaining independent legal and medical advice, the ASIC report has highlighted some of the shortfalls of CommInsure life insurance and how the bank is responding.
One of the key findings was that many of the medical definitions were out of date and that the trauma insurance policies being sold were not in line with contemporary medical opinions, specifically around heart attacks and rheumatoid arthritis. Customers were left with outdated policies not only because the cover was not in line with medical developments, but also because policies with outdated definitions were still being sold.
In response, CommInsure has updated its medical definitions for new policies and also applied these to existing policies, including those for which claims were previously denied as a result of the outdated definitions. Affected customers are being identified and are receiving the appropriate insurance payments.
In a widely publicised allegation, medical professionals working for CommInsure had previously alleged that they were put under undue pressure to state certain medical opinions, but ASIC has found no evidence to support this.
A range of other general areas of improvement were identified, including the need for more prompt and overall better communication with customers, improved training and assistance for claims managers and technical improvements to the CommInsure database.
ASIC is continuing to investigate the possibility that CommInsure had deceptively or misleadingly advertised life insurance policies before 2016 and further updates will be provided on its conclusion.
This comes as a relief for many life insurance customers, as well as for those considering taking out cover. CommInsure's cooperation and willingness to act on ASIC input is solid reassurance that insurance disputes and complaints to ASIC are taken seriously and acted upon.
- All grown up: Millennials lead the pack in life insurance
- Considering income protection? These new rules may affect you
- Why you should be thinking about income protection insurance now
- Super changes could catch millions of Australians unaware
- Ask Finder: Is insurance through my superannuation good enough?