Greatest engagement by advisers this week was with our story on the withdrawal by MLC Life Insurance from offering TPD or IP cover for certain high risk occupations – yet another indicator of claims and sustainability pressures impacting the sector…
MLC Life Insurance has confirmed that effective this week, it will cease offering Income Protection and TPD cover for certain high-risk occupations.
This decision by MLC stems from a recent internal review on claims trends, where the insurer identified a significant number of claims arising from a small group of customers with high-risk occupation ratings. Whilst MLC has traditionally been known as an insurer who can offer disability cover to certain high-risk occupations, its analysis suggests that further growth in these customer groups may present sustainability challenges.
According to MLC, this decision will bring it in line with the current practice of major insurers in the TPD and Income Protection markets.
Whilst cover for Income Protection and TPD will no longer be available for these specific high-risk occupations, MLC maintains that, in many cases, its Life Cover and Critical Illness Cover options are still available or available under individual consideration.
Key occupations that will be impacted by this decision (effective from 8 August 2022) include:
- Police Officer, Detective, Other (not motorcycle, airwing, bomb disposal, search & rescue)
- Police Officer, Dog Squad
- Railway Police
- Tram Police
- Train Police
- Police Superintendent
- Armed Services
- Private Investigator – armed
- Security Guard both Armed and Unarmed
Commenting on this move, MLC Life Insurance GM Retail Distribution Partnerships, Michael Downey, noted, like all life insurers, it regularly reviews the insurance cover it offers to customers: “Unfortunately, it became clear that offering IP and TPD cover to a small group of high-risk occupations was no longer sustainable.”
Despite this change, however, Downey said the insurer continues to offer cover, including for TPD and IP, to over 100 Special Risk occupations.
Advisers have been urged to contact their MLC Life Insurance Business Development Managers for further information.
So goodbye to all those nasty Yearly Renewable IP contracts with the dodgy definitions of injury!
So where will these poor buggers go – off to the general insurance world for personal accident policies? Talk to their superfunds in the knowledge that most TPD claims will be challenged in court?
Maybe it’s about time that APRA actually looked at the conditions for issuing an insurer’s licence, which is after all supposed to be a community “good”.
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