Information on CommInsure claims
With the focus of the recent Royal Commission hearings focussed naturally on areas where the life insurance industry can do better, it is easy to forget that most of the customers who claim on their policies receive their benefits.
For instance, in the year to 30 June 2018, CommInsure paid around $1 billion in claims for life, trauma, TPD and income protection benefits to around 20,000 customers. In the last five years, CommInsure has paid around $4.7 billion in these types of claims.
From time to time, customers make claims on life insurance policies which, under the terms of the customer's policy, the life insurer is unable to pay. Because of their nature and eligibility requirements, some types of insurance cover might have more declines as a proportion of total claims than others.
Typically, insurance cover that is offered by advisers with underwriting (that is, where the life insurer asks questions about the customer's health and lifestyle before deciding to offer them cover) has fewer declines as a proportion of total claims compared with similar types of insurance that are offered without underwriting.
Insurance policies include definitions to explain what things will trigger the ability for a customer to be eligible to make a claim under the policy, for instance, their inability to work or the types and extent of certain medical conditions.
CommInsure's definitions are created and updated in line with policies and procedures to ensure compliance with legal and regulatory obligations and with the Life Insurance Code of Practice (the Code).
The Code became effective from 1 July 2017. It requires that where benefits are payable to a customer after a defined medical event, these medical definitions in on-sale policies are reviewed at least every three years, and updated where necessary to ensure the definitions remain current. This will be done in consultation with relevant medical specialists.
CommInsure complies with the Code, which also has minimum standard definitions for key medical definitions including Heart Attack and Cancer. CommInsure's definitions meet or exceed these minimum standards.
CommInsure's latest Heart Attack definition for all customers was updated in September 2017 and the definition exceeds the minimum standard in the Life Code of Practice. CommInsure also updated its Cancer definition for all customers in June 2017. This definition also exceeds the minimum standard in the Life Code of Practice.
Overview of the Deloitte report and response to ASIC investigation.