The Australian Securities and Investments Commission’s (ASIC’s) review of life insurance claims handling risks being seriously flawed because it did not sufficiently canvass the views of either advisers or their clients.
Money Management columnist and life/risk claims handling expert, Col Fullagar said that the ASIC process saw insurer management and staff being interviewed but apparently not advisers and claimants.
“This is akin to reporting on the Royal Easter Show experience by interviewing stall holders but not those attending the show,” he said.
In a column to be published in an upcoming edition of Money Management, Fullagar also noted that the ASIC review had referred to the details of almost 5,500 disputes lodged with various external bodies between 1 January 2013 and 14 March 2016.
He said this represented close to seven complaints a day for every working day of the week.
Elsewhere in his analysis of the ASIC claims-handling inquiry, Fullagar pointed to the pivotal role of advisers in assisting clients at claims time but also questioned whether insurers maintained adequate staffing in their claims-handling areas.
He questioned whether a reference in the ASIC report to “poor administration systems that do not support customer service” actually included enabling staff to work fewer than five days a week.
“…whilst this is great for staff, does having an assessor that works three days a week condemn the claimant to a claims management process that is 40 per cent slower than the equivalent claimant who has a fulltime assessor?” Fullagar asked.
He pointed to the report’s findings that “consistent with ASIC and Australian Prudential Regulation Authority (APRA) licensing requirements, life insurers are required to have available adequate resources (including financial, technological and human resources) to provide the financial services covered by the license, and also to carry out supervisory arrangement”.
Fullagar noted that the report had said: “As part of this obligation, insurers should ensure that they have an adequate number of suitably trained staff along with suitable workflow systems and databases, to enable staff to deliver timely and accurate claims decisions.”