Self-regulation not adequate for life insurers

17 July 2018

Key mental health body beyondblue has warned that it is not confident that enough safeguards are in place to allow life insurers to participate in the rehabilitation of workers to assist their return to the workforce.

In an answer to a question on notice from a Parliamentary Committee of Inquiry, beyondblue said it continued to have concerns about the involvement of life insurers in the rehabilitation process, notwithstanding the clarification provided by the Financial Services Council (FSC) representing the major life insurers.

It said that any approach allowing such involvement by the life insurers would require appropriate architecture, implementation and monitoring with careful design “in genuine partnership with consumer representatives and experts”.

Related News:

“Moreover, in light of the findings and recommendations of the Committee’s recent inquiry into the life insurance industry, beyondblue is not confident that self-regulation would safeguard this intended design,” the beyondblue answer said.

However, it said these concerns might be significantly addressed through the design of a model that structurally separated payment and administration functions.

“For example, life insurers could contribute funds to an independent entity who would triage claims, facilitate evidence-based treatment and rehabilitation and administer the payments to policy holders,” the answer said.

Elsewhere in its submission, beyondblue argued that people affected by mental health conditions had experienced significant difficulties in obtaining and claiming on different types of insurance products when compared to the rest of the population.

“People report poor experiences with many different insurers across the life insurance industry for products such as income protection, total and permanent disability (TPD), and life insurance, indicating that this is a systemic issue,” it said.

“This significantly diminishes the power of someone with a mental health condition to ‘shop around’ to obtain appropriate coverage and can result in people feeling that they have no option but to accept insurance on terms they consider to be unfair.”

Recommended for you




This article didn’t go into any detail of specifically what and where beyondblue are concerned? Even the last paragraph one has to assume at the issue - which I surmise is that exclusions are offered etc. insurers are a business. Plus the adviser does the shopping around. So what is the issue? Hot air or what?

Yes more of the typical blinkered and ignorant comments from Beyond Blue and their ilk. Clearly blissfully unaware of the reality that if cover was provided to all the people they presume to represent, they (and the rest of us) would be unable to afford the premiums. People with a history of mental health issues are more likely to claim - it's as simple as that.

Add new comment