The regulator overseeing life insurance providers, the Australian Prudential Regulation Authority (APRA), has stated it is examining a number of issues relating to CommInsure but has yet to launch a formal investigation into media allegations the insurer was incorrectly denying claims to its clients.
Addressing the House of Representatives Standing Committee of Economics on 18 March APRA chair Wayne Byres said the regulator had been in contact with the Commonwealth Bank and its board and senior executives to follow up on issues raised over the past 18 months.
However, when questioned by the Committee Byres would not be drawn on particulars regarding CommInsure or allegations regarding claims payouts stating APRA’s inquiries had only recently begun.
“We have met with management and to continue do. We have powers to request various documents, which we are reviewing.”
APRA member Geoff Summerhayes stated APRA had met with the CommInsure board and was reviewing information from that meeting saying “We have met with management and to continue do. We have powers to request various documents, which we are reviewing.”
When questioned as to when APRA would be able to make a public statement Byres stated that the Australian Securities and Investments Commission (ASIC) was most likely to release public findings while APRA was unable to do so.
“I would distinguish between our focus of inquiry and the ASIC focus of inquiry, because ASIC is particularly focused on the issues with individual customers and making sure that customers are treated fairly and to the extent customers have not been treated fairly that that matter is put right, in some shape or form,” Byres said.
“I would expect, as a result of that, that there will be…some public response. ASIC has made it clear that they are doing an investigation and, usually, when they do those investigations there is some public response at the end.”
“We tend to work in a different way by virtue of the confidentiality constraints on us, so we would not, in the normal course of events—unless we launched a formal investigation, which we have not yet done—produce a particular report at a conclusion.”
Byres admitted the CommInsure issue had implications for the way the insurer was operated and may even raise wider issues about the Commonwealth Bank group but stated “…it is just too early to tell, at this point.”
