CommInsure’s claims handling report by Deloitte is “highly selective” in the types of claims selected for review, which raises doubts about whether the report accurately reflects assessment practices, a law firm said.
Maurice Blackburn Lawyers accused the Commonwealth Bank (CBA) of not learning from past mistakes of the way it handled claims and treated members, while questioning the claims representative sample that were used for the report.
The firm’s superannuation and insurance principal, Josh Mennen said: “The terms of reference for this report appear to have been very carefully limited to ensure an outcome that does not fully account for what was clearly a dark period within CBA”.
“We also have concerns at how comprehensive this review has been, as the report confirms that no customers have been interviewed as part of the investigation. Nor does [it] say that any claims staff were interviewed,” he said.
The law firm also took issue with the claims samples that were referenced, particularly in relation to the group total and permanent disability (TPD) category, which Mennen said was “notoriously well known for having the highest denial rates across the industry”.
“Today’s report noted there were 2172 group TPD claims subject to review, yet only 10 per cent of these were selected for review,” Mennen said.
“This compares to 98 per cent of death claims being selected for review, despite such claims being well known to be amongst the least disputed in the industry. The report also did not look at conflicted incentives paid to review and internal staff, indeed it expressly states that this was not looked at.”
“That is completely unacceptable – we know from ASIC’s reporting that decline bonuses were paid by some insurers to claims staff. CBA seek to maintain such a practice is no longer occurring, but there is nothing to outline to what extent this may have occurred in the past or what has been done about this.”
Mennen also said the CBA’s justification that CommInsure’s heart attack definitions were consistent with competitors in May 2014 was unacceptable, as was its decision to update its heart attack definition but backdate new definitions to policies entered from 2014.
CommInsure commissioned Deloitte to issue an independent expert report on its claims handling process following media reports on poor claims handling.
In a statement, CommInsure said it had also commissioned reviews last year by DLA Piper and Ernst & Young, which took 10 months to complete and involved more than 150 people, a manual review of around 200,000 email documents and around 80 independent interviews.
