Life insurers should not have to delay pursuing greater involvement in worker rehabilitation until they have implemented the recommendations of the Parliamentary Committee of Inquiry into the Life Insurance Industry, according to the Australian Prudential Regulation Authority (APRA).
Answering questions on notice from the Parliamentary Joint Committee on Corporations and Financial Services, APRA made clear that it supported life insurers having greater involvement in worker rehabilitation, albeit that it recognised that complexity would exist around such arrangements.
“APRA is of the view that there are benefits in life insurers having greater involvement in rehabilitation regardless of how the injury or illness occurs,” the regulator told the committee. “Given the complexity of some rehabilitation cases and potential for gaps or overlap to emerge in relation to insurance or other support, there is however a need to ensure the regulatory framework maintains a coordinated approach between life insurers, insurers providing workers compensation insurance and private health insurers.”
On the question of whether the life insurers should delay their involvement until after they had implemented the recommendations of the committee, APRA signalled that the benefits outweighed the deficits.
“The recommendations contained in the committee’s report into the life insurance industry are important and APRA has strongly encouraged industry to act upon them,” the regulator said. “APRA believes however that there are important benefits for policyholders through sensible reform of the current regulatory framework that could be unlocked and which are not dependent on actioning the committee’s recommendations. On this basis, APRA does not believe it is necessary to delay reform on this issue.”
