Life insurers are likely to take over the task of collecting and analysing claims and dispute data from ASIC and APRA, after the two regulators gave their support to a data gathering project presented by the FSC.
Under the project, life insurers would fund an independent data expert to collect and analyse claims and disputes data, and help insurers pass on relevant data to ASIC and APRA when required as part of their joint Claims Handling Data Collection scheme (see:Regulators Begin Collection of Claims Data).
The two regulators announced in-principle support of the industry driven project as part of the recent release of the second round of claims and dispute data, which confirmed advised insurance had higher levels of successful claims (see: Advised Insurance Best for Claims).
“The agencies consider that robust reporting offers the life insurance industry an opportunity to better understand and communicate claims performance to the community,” ASIC and APRA stated.
“The industry has acknowledged this by approaching the agencies via the Financial Services Council with a proposal to engage and fund an independent data expert to collect and analyse claims and disputes data,” the two regulators added.
“…robust reporting offers the life insurance industry an opportunity to better understand and communicate claims performance to the community…”
ASIC and APRA stated the project would lift the data gathering and reporting capabilities of the life insurance sector as well as its ability to communicate its performance around claims and dispute management.
Their joint support was, however, subject to a number of conditions including that the data gathering project is implemented in line with the timetable and objectives developed by ASIC and APRA to have insurer specific data made available to consumers (see: APRA Says Claims Data Will Be Made Public).
ASIC and APRA stated they are currently working with the FSC on its proposal and APRA plans to finalise a proposed Reporting Standard, and collect data under it, later this year and to publish insurer specific data in early 2019.
The FSC welcomed the in-principle support of the two regulators stating the Council and its life insurance members “…wish to build on APRA and ASIC’s existing Claims Handling Data Collection project to collect more granular information from the industry in a range of areas including better information on the types of impairments claims are paid for”.
According to the FSC, the project would include a blue print for its life insurance members to collect better consumer data in an industry-standardised format and help consumers understand the benefits of life insurance while applying further transparency and accountability to the claims handling process.
Let us hope that the Independent data expert also has a deep knowledge of the Life Insurance Industry and can demand relevant data that collects real and meaningful data.
There has been a tendency for vested interest groups like the FSC to doctor data to suit their masters and to not ask for the important data that would properly point out the real issues.
If this is not handled properly, it will just be another talk fest with inaccurate and tainted data, used to further the vested interest parties agenda’s to increase their profits at other peoples expense.
It has already been proven beyond doubt that advisers have much higher success with claims for their clients.
One bit of data that should be asked for the likes of, say direct carriers, is what percentage of claims are paid out at 100% of the Insured amount and what are the exact time frames that claims are processed.
By this we mean, not some vague percentage within bands. That data is erroneous and means little.
We need exact numbers, as each claim is not a number or a percentage, they are real people and the data must show this.
Data that has things like, Type, Amount, client condition, time to process claim, claim amount paid etc.
From this data, a true picture can be built around the rubbish life policies being flogged and the consequences of this, where peoples lives are destroyed through claim rejections or reductions and the fact most of those people are now uninsurable.
What a waste of time! Yesterday a former client informed me that he just had a partial victory over a recalcitrant insurer through the FOS mechanism. It had only taken four years and he still about $400,000 out of pocket because his income protection benefit was above the FOSs limit and he was forced to agree to contest ONLY that portion of his IP benefit that was under the FOSs limit. This particular insurer would probably score very well with this FSC garbage and everyone thinks it’s all wonderful In claims
Traditionally many insurers employed ex-nurses or even ex doctor’s in IP claims areas. Apparently this particular insurer now employs lawyers in the claims area and judging by the experience of this particular claimant there is a clear intent not to pay claims over the FOSs limit, or at least stop the outflow.
The successful complainant rang the insurer four working days after the FOS decision to inquire when he would be paid and be asked to sign a condition of release involving non-disclosure of the decision which apparently the insurer is still able to impose on the claim. The response was that they weren’t in a hurry and they might come back in 48 hours.
Whatever the FSC is proposing is just glossing over a very rotten smelly mess designed to snow ASIC and dozy Ministers. That FOSs IP limit needs to be increased but you can guarantee the insurers and their lobbyists the FSC will be pushing hard to keep it under $12,500 a month.
Comments are closed.