CommInsure has rejected criticisms levelled at it by Maurice Blackburn Lawyers in relation to its independent report by Deloitte, which was commissioned last year by CommInsure following concerns raised in the media about its claims handling practices.
Referring to comments made by superannuation and insurance principal, Josh Mennen, CommInsure has issued a statement countering his claims and sought to clarify “misstatements" that were made about this and other independent expert reports by DLA Piper and Ernst and Young.
In response to Mennen’s statement about the law firm’s concerns on how comprehensive the review was CommInsure said both the Australian Securities and Investments Commission (ASIC) and the Australian Prudential Regulation Authority (APRA) had been provided with all reports and reviews.
It quoted APRA member, Geoff Summerhayes, who told the Parliamentary Joint Committee on Corporations and Financial Services Inquiry into the life insurance industry in February that “APRA is satisfied that the reviews are robust, complete and independent. APRA now will focus on CommInsure’s implementation of the reports’ recommendations”.
However, Maurice Blackburn issued a counter statement this morning saying it stood by its concerns.
“CBA may not like the concerns we have raised, but we stand by the factual basis for the comments made, based on the information CBA released in the Deloitte report,” the law firm said.
CommInsure also sought to reject Mennen’s statement that claims samples referenced in the report were questionable, stating that a large number of total and permanent disability (TPD) claims were reviewed (219 out of 2172), and said this was the “largest cohort of claims by far”.
Deloitte examined 21 per cent of declined claims in the last five years while 100 per cent of terminal illness claims over the past three years to April 2016 have been reviewed.
Deloitte has reviewed 98 per cent of death claims and 100 per cent of terminal illness claims over the past three years.
In response to Maurice Blackburn’s criticism that the report did not look at conflicted incentives, CommInsure said that was not the objective of the Deloitte report, adding previous independent reports had examined key performance indicators (KPIs) and had not found issues that would lead to undesirable outcomes for customers.
“Claims staff do not receive financial incentives for declining claims or delaying claims assessments,” it said.
However, in its counter response, Maurice Blackburn, said it did not dispute that this was the case now.
“However our concern is they have not categorically stated they did not have such a practice in place during the relevant period. CBA should have clarified this concern,” it said.
On outdated heart attack definitions for claims, CommInsure reiterated that in May 2014, its definitions were consistent with competitors. It updated its heart attack definition in March 2016, backdated to May 2014.
On the law firm’s claims customers were not contacted or represented as part of the review process, CommInsure said Deloitte had complete access to data, claims, files, emails, customer correspondence, and doctors reports’ while it also interviewed claims staff.
It also said that if Deloitte required more information from customers or from CommInsure, they would request it, after which CommInsure would contact the customer or through their trustee to obtain the information.
“It is not appropriate for Deloitte to contact our customers directly. It is entirely incorrect to say there has been no contact with customers,” CommInsure said.
In a counter response, Maurice Blackburn said Deloitte’s report clearly stated that “when assessing poor customer experience we have not interviewed the claimants related to claim and have based this assessment on the evidence within their supporting claim file”.
“If it is the case that customers were contacted by someone other than Deloitte, then it has always been open for CBA to clarify that. Unfortunately however, that’s not what their report says,” the law firm said.