Income protection insurers urged to support psychological claimants
Insurers in the income protection space are being urged to adopt a new best practice framework for the management of psychological claims, to boost the rehabilitation prospects of their clients.
Speaking at the launch of the SuperFriend Taking Action: A best practice framework for the management of psychological claims, Financial Service Council chief executive, Sally Loane stressed the importance of helping people who have suffered a mental illness back to work.
Loane said it was important that insurers adopt best practice in this area to help claimants' rehabilitation, "and for the long-term sustainability of income protection cover".
"Assisting people who have a psychological claim with their rehab increases return to work rates, which translates to lower claims costs for income protection on a new present value base," she said.
"Higher rates of rehab are of benefit for all insurer lives and equate to a more stable premium on products, and a more sustainable industry all round."
While Loane highlighted the benefits of an increased return to work rate for psychological claimants for the industry, she also noted that it was of benefit to the Government by cutting "the fiscal cost of disability support pensions and the NDIS".
Despite the potential benefits of enabling the insurance industry to provide more targeted support, Loane said current legislative arrangements prevent life insurers for doing so, hampering their ability to maximise the help they can give clients.
Loane said the FSC was "interested in pursuing this as a reform" and had spoken to Treasury about adjusting legislation to give the industry greater opportunity to support psychological claimants.
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