Life insurers should be free to make changes to medical definitions as they see fit instead of relying on a common industry standard, according to a senior NAB executive.
Addressing the PJC Inquiry into the Life Insurance Industry in Canberra last week, NAB Chief Customer Officer, Consumer Banking and Wealth Management, Andrew Hagger said he was unsure if the imposition of standard definitions was the best approach for life insurers.
“If we see the need to update a definition, or MLC Life does, why should they wait for the rest of the industry to update the definition,” said Hagger, who is also a non-executive member of the MLC Life Insurance Board.
“The life insurance code…says definitions will be updated periodically but there is nothing to stop an insurer jumping ahead of that, and nor should there be.”
“If we see the need to update a definition…why should they wait for the rest of the industry…”
Hagger said the insurer had updated its definition of a heart attack following media coverage of the CommInsure heart attack definition and had commenced a claims assurance review to ensure definitions were up to date.
He also defended the process of underwriting at claim within direct insurance stating there was a segment of consumers who wanted to purchase insurance through that channel and the underwriting process was clearly disclosed at that time.
“With the digital products that you are describing which is life insurance for lump sum term, you are not underwritten,” Hagger said in response to a question from Senator John Williams.
Responding to latter question from PJC Chair, Steven Irons about whether consumers should be made aware of the lack of underwriting at application, Hagger said, “There are customers who want to deal through that channel…the exclusions are very clear to customers through the direct channel.”
“When they purchase the product and through product disclosure statements and questions asked, this is made clear to them,” he added, stating that when claims were contentious NAB, and MLC Life, had assessed them on what was fair in the circumstances.
