BT Financial Group (BTFG) has publicly admitted it was the life insurer with 37% TPD denial rate mentioned in the recent ASIC Life Insurance Claims review but claims the figure has been misrepresented and is not reflective of the group’s actual denial rates.
The group issued a press release the day after ASIC refused to name any insurers despite being pressured to do so by a House of Representatives Economics Committee, and on the same day a newspaper report stated BTFG was the insurer in question.
BTFG Chief Executive, Brad Cooper said the data quoted by ASIC was not comparable with other insurers due to the way BTFG reported its denied claims and the lack of consistency in reporting across the life insurance sector.
Cooper said BTFG used a wide interpretation for ASIC’s request for data due to the absence of standard industry definitions in relation to claims and included claims made by consumers not insured with BTFG or claims that were withdrawn.
He added that of the 58 TPD claims denied in 2015, 13 were declined because the claimant did not have a TPD product or held a TPD product with another insurer, did not proceed with a claim or returned to work while three claims were paid and a further eight other claims were paid under other insurance cover.
“ASIC said…the data that has been provided by industry participants is not consistent. Any comparisons would be misleading…”
As such, BTFG’s average decline rate would be much closer to the industry average of 16%, according to Cooper.
“ASIC said at its recent appearance at the House of Representatives Economics Committee that the data that has been provided by industry participants is not consistent. Any comparisons would be misleading and would not provide accurate information to consumers, particularly when they are comparing policies.”
He also stated that data ASIC had warned was misleading to consumers, and should not be used to assess claims performance, was now being used in a way that misrepresents the track record of BTFG’s Life Insurance business, with the 37% figure representing TPD claims denied over three years, and not just 2015.
“We are committed to ensuring our claims practices are fair. We had our Life claims management practices validated in August 2016 by EY. This independent review found that our assessment of claims is of a very high standard and all claims reviewed ‘demonstrated a broad minded, objective and good faith approach’,” Cooper said.
Hey Brad Imagine how Advisers felt after the ASIC 413 report looked at 79 advisers out of approx 12000( That’s .006%!!) and came out with the Life Insurance Framework!! Do you think that was indicative of the entire adviser force??
The Life Companies are scrambling to protect themselves.
Shame they did not scramble to tell the REAL TRUTH around churn and instead, let the advisers be screwed to the wall, based on inaccurate data they perpetrated in their favour.
BT are correct in that the data is flawed and ASIC have, after the horse has bolted, shut the gate, though it was premature to release to the baying media, data that was flawed, with the resulting outrage from all and sundry.
The FSC is 100% responsible for all the stuffups and damage to the Life Insurance Industry, as they are supposed to be guiding and instructing Life Companies on proper protocols, a job that they have failed to do.
To get things done correctly, ASIC should next investigate all board members and managers of the FSC who have been involved in the whole LIF debacle, remove those responsible and go back to the beginning, by asking relevant questions and demanding accurate and relevant answers.
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