AIA Australia has recommended the establishment of an Independent Claims Assistance Service to aid consumers when making a claim while also reducing the involvement of third parties, including lawyers, at time of claim.
The life insurer made the recommendation as part of its submission to the Parliamentary Joint Committee Inquiry into the life insurance industry and stated the service should be industry funded and deal with inquiries about claims processes, lodging claims, and claims decisions.
AIA Australia said the service would not be restricted to any claimants but would be useful for consumers insured through direct channels “…as they do not have the advocacy services provided by superannuation trustees, or financial advisers, to assist them in the same manner as the other channels”.
The submission stated that legal representation during a claim needed to come at an appropriate time but the current trend of engaging representation while lodging a claim was “…unnecessarily eroding payments in a growing number of cases.”
The submission stated that legal representation during a claim was “…unnecessarily eroding payments in a growing number of cases.”
AIA Australia stated the growing involvement of legal representation at time of lodging a claim was unnecessary given that recent ASIC reviews have found that 90% of life insurance claims are accepted and paid, most without any form of representation.
“We want to do more to help individuals during the claims process to ensure they can have the full support of their entire benefit payment, rather than needlessly sharing a significant proportion of it on legal representation.” AIA Australia stated in the submission.
The life insurer has also voiced its support for ASIC’s call for a public reporting model for life insurance claims data and claims outcomes and suggested the establishment of a centralised Insurance Claims Register.
Under this approach all claims for a life insurer would be lodged in a central register and data around handling times, outcomes and disputes could be extracted.
AIA Australia also stated the register would be useful in setting standard definitions and industry service parameters and could also be used to access claims histories during underwriting and claims processing to identify cases of purposeful non-disclosure or fraud.
I’m find this very interesting as for the majority of claimants that have an adviser they don’t have any issues. Of course the group schemes that don’t provide any support to their insured clients is probably the reason why lawyers have to get involved. It never seems to surprise me that it’s made out to a bigger issue that it really is. Here’s a suggestion, how about allocating an adviser to group schemes to look after the insured members at every level, appropriate covers / policies, claims etc. There is no need for independent claims service to established.
Perhaps an easier approach would be to allocate any Group schemes to advisers,pay them a service fee to be determined,as advisers usually deal with their individual clients at claim time this would obviate the need for a separate claims service which will also entail additional cost to the consumer (premiums) & the industry in general
A tribunal of retired lifies could cut through the BS of most claims disputes, particularly when the life office starts to play funny buggers.
It seems to any caring and experienced adviser that it’s logical to hand the claims service to [good] advisers in the contexts described below and it’s an admirable approach. It shows however that the advisers suggesting this have no concept of how many claims are on the go at any time – there are simply not enough advisers in the country to do claims support and client advice to our population. Especially when you take into account that only non-institutionally-based advisers could be considered for such a role.
Further, the advisers who appropriately see they have an obligation to support their own clients at claim time and so believe the suggestion to farm out claims is valid, also have no idea of the high percentage of their adviser colleagues who decline to become involved (or simply ignore the insurer’s advice) when advised by an insurer of a claim on a policy attached to that adviser!! (We are very aware of this phenomenon from the claims review work we have conducted over recent years.)
Keep up the good work for your clients and it’s probable that you would also be the advisers to whom claimants are being referred by friends/family etc when they have a claim and need help. Claims support [on non-advised business] by advisers is happening here and there but the support needs formalising if the industry is to properly manage the growth of default insurance in super and direct business.
Comments are closed.