September 18, 2018
Are you more likely to consider recommending products from an insurer which more frequently updates its medical definitions?
- Yes (73%)
- No (17%)
- Not sure (10%)
Our latest poll is seeking your views as to whether you are more likely to consider recommending products from an insurer which updates its medical definitions on a more frequent basis?
This questions stems from information presented to the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, which heard last week that many life insurers did not have a regular, formal definitions review process until at least 2016 (see: Major Insurers Lacked Definition Review Processes).
All life insurance members of the FSC were required to have a formal definitions review process for on-sale policies in place by mid-2017 when the mandatory Life Insurance Code of Practice took effect, which requires a review of definitions at least every three years.
The Commission heard that while three insurers had opted to use this time frame, another would carry out a review every 18 months and six had chosen to undertake a review of medical definitions each year.
So, how much of a ‘make or break’ issue is this for advisers, and their clients? The negative media coverage in 2016 around CommInsure’s use of an outdated definition for heart attack seems to confirm that community expectations in this area are high.
Is this your view, or in your experience, is the time-frame under which medical definitions are reviewed less important than the cost of the policy or the underwriting process or the exclusions your client may face when seeking cover.
Tell us what you consider to be the most critical issue in play in this situation and we’ll report back next week.