Col Fullagar spoke about the so-called claims management bullies earlier this year at the Money Management Risk Issues workshop. In this second part of his presentation he looks at verbal and written bullying.
Let’s look at verbal bullying. Sometimes aspects of a claim may be unclear, so the insurer appropriately will seek to get clarity.
One tool at their disposal is the Factual Interrogation, or to use the insurer’s terminology, the Factual Interview.
Sadly, too often, those who agree to the interview – and to be honest, it’s not like they are given a choice – find it little short of an interrogation bordering on entrapment.
It is not unusual for the insurer to provide little or no detail at all of what is to be discussed – but if pushed, the insurer might reveal, “We want to clarify your pre-disability financial position” or “We want to check on your current work duties”.
But why can’t specific initial questions be provided prior to the interview?
When one insurer was asked the response was: “I am aware that we are not obligated to provide the list of questions in advance”.
What the insurer is obligated to do is work in line with their duty of good faith, which might just be compromised by requiring the claimant to enter into an interview all but blind as to its intent and content.
Factual interviews can extend for three hours or more.
Many questions are asked, but generally not positioned.
For example, the question might be “How many hours a week are you now working?” rather than “Your policy allows you to work up to 10 hours a week so we just need to clarify what hours you are currently working”.
If the interviewer knows what they are after but does not share that with the claimant, then you have an imbalance of power which can lead to – you guessed it!
And then of course there is the interviewer who often has a legal or law enforcement background. Not of itself an issue, unless it reflects in their interview technique.
For example, one adviser who attended a client’s factual interview conducted by an ex-member of the constabulary reported:
“I found the interviewer very confronting and very rude to my client. He appeared insensitive to my client’s feelings and medical condition”.
Bullying? Nah, never happens!
As tough as a ‘factual’ might be for the claimant, it is nothing compared to what can happen when an insurer’s internal legal counsel or an external solicitor get involved.
“Man-up” was the response of one internal legal counsel when the suggestion was made that legal discussion might benefit from less aggression.
Letters of intimidation
Something many claimants have in common is a feeling of inadequacy.
Prior to claiming, they may have led an active life and held down a responsible position in the workplace. Then an unexpected sickness or injury occurred and it all changed.
They may no longer be able to work and support the family. They may no longer lead an active life.
The last thing they need is to receive correspondence from their insurer that intimidates them and treats them with disdain.
Five years ago Paul ran a successful small business employing several people; then he suffered a nervous breakdown.
Whilst Paul observed essentially from the sidelines, the business continued to operate but at a slowing pace.
The insurer became prudently concerned that he was involved in the business, but rather than tell him of their concerns they simply started to swamp him (from his perspective) with claims requirements including:
- Details of any involvement with the business or its employees;
- Monthly financial reporting;
- An independent medical examination;
- Provision of extensive financial evidence going back five years for several different business entities; and
- Daily reporting of non-business activities.
Paul had no idea what was going on so the insurer was asked:
“¨It would assist Paul’s well-being and understanding of the reasonableness of your requirements if you could advise him if you have a management plan in regards to his claim and if so, what is that plan”.
Initially the question was ignored, so there were two follow-ups. Finally, after six weeks the response came:
“You have requested information relating to the current strategy relating to your claim. Our strategy, as with all claims, is to ensure that you continue to meet the definition of either totally or partially disabled under the policy terms and condition (sic) and therefore remain eligible for benefit payments”.
Get that up ya! The audacity of Paul to question the insurer in this way.
Is this a one-off; absolutely not.
One assessor when similarly questioned, responded that it would be preferred if the insured would simply supply the requested information and then “leave us alone so we can do our job of assessing the claim”.
What better way to empower the claimant with that ever-important sense of inadequacy, or as one claimant put it:
“The whole claims process made my health problems worse. I began to fear any correspondence from the insurer to the point I felt I would be better off without them”.
The financial controller
There is no greater example of the power imbalance than control of the financial purse strings. The insurer holds them and the claimant is made repeatedly aware of this by the insurer’s regular communication stating:
“In order to enable us to assess your claim and pay benefits, we need the following ...”
It’s subtle – but the message is there.
If the message about financial control does not get through, there is always the threat of suspension of benefit payments.
We saw one example previously, but it is certainly not an isolated one.
People take out income protection insurance in order to be able to maintain their lifestyle and that of their family in the event of a sickness or injury. If benefit payments are suspended or even if there is a threat to suspension, the impact on the claimant can be devastating.
One claimant received several threats of benefit suspension over a number of months, which in part led to the deterioration in his mental condition and his treating psychiatrist recommending that he take medical retirement.
Whilst clearly not the intention, you would be forgiven for thinking that that comes close to representing physical bullying.
Late benefit payments
Benefit payments are made fortnightly or monthly. What is so hard about making payments on time – and yet it is a constant complaint I receive from claimants.
A late benefit payment is simply a short-term benefit suspension from the claimant’s perspective, which serves to remind them that their financial well-being is not guaranteed but is at the behest of the insurer.
Independent medical examination
Yet another potential claims management baseball bat is the so-called independent medical examination or IME.
An IME is when a medical specialist, not previously involved in the care or treatment of a claimant, undertakes an examination of the insured and then reports findings to the insurer.
The claimant is often informed they are required to attend for an IME in the benefit payment letter.
Also, it is not unusual for the letter to set out:
- That an appointment has been made;
- The name and address of the doctor appointed; and
- The day and time of the appointment.
It is also made clear that if the claimant does not turn up, they may be charged a cancellation fee.
Notwithstanding they may be functioning under some medical restrictions, what claimants generally want is to feel they still have some say over their own destiny; they have a say in what is going on.
When an insurer simply tells a claimant what to do and when, where and with whom to do it, it is a great way to reinforce any thoughts the claimant has in regards to low self-esteem.
It was suggested to one insurer that they provide the claimant with details of several different specialists and leave the final choice up to the claimant.
The insurer refused citing, “We do not have the facility to do that.”
Funny, other insurers managed to do it when asked.
The impacts of IMEs on claimants is many and varied, including but in no way limited to:
- Feelings of apprehension as they wait for the date of the IME to arrive;
- Feelings of anxiety and embarrassment as they detail their personal and medical history to a stranger, knowing full well that a report will be written and read by other unknown parties;
- Discomfort and pain as they are prodded and poked to see what restrictions to movement exist; and
- Apprehension as they wait for weeks to find out what was said about them and what will happen to their claim.
And, some insurers take the enlightened approach of not sharing the IME report with the claimant until the claim assessment has been completed, just to drag out the feeling of uncertainty for a few more weeks.
In what way is this not potentially psychological and physical bullying?
One claimant simply and succinctly described the IME as “degrading and humiliating.”
The claims management process can have a direct and devastating impact on the life of the claimant; great care must be taken to avoid this.
An insured in the media industry was seeking an own occupation TPD payment for a back problem.
The insured also undertook appearance work outside her mainstream occupation.
The insurer wrote to the insured’s booking agent and unnecessarily made reference to the claim type, ie, ‘total and permanent disability’.
Who is going to book appearances for someone who is totally and permanently disabled?
In only a few moments, the insurer directly and severely impacted on the claimant’s ability to receive any further appearance opportunities.
When the claimant found out, she was distraught.
When the insurer was advised there was an indicative shrug of the shoulders - but certainly no acknowledgement of error or offering of an apology.
Some may be tempted to look at these situations and suggest, “OK the industry is not perfect, but these are simply good examples of poor service”.
Fair enough, these are simply examples of poor service in the same way that sexual harassment is simply an example of a misguided but otherwise harmless act.
Some may justify these situations by citing the need for prudent claims investigations to protect the insurer against the evils of fraudulent claims.
Fair enough, but isn’t it the case that insurers brag about the high 90 per cent of claims that are genuine and paid. So how can the 1 or 2 per cent be used to justify inappropriate behaviour towards genuine claimants?
And even if a claim is less than genuine, does that justify bullying?
Perhaps there is too much focus on justifying actions and the intent of those actions, rather than focussing on the impact on the recipient, aka the claimant.
As one treating specialist wrote in regards to his patient:
“The current level of activity required to comply with the demands of the insurance company are causing significant stress for my patient, and in so doing inhibiting his capacity for any further improvement.”
If it is accepted that incidences of bullying behaviour exist and it is similarly accepted that this is unacceptable, the question should be asked, “How can we reduce it?”
My principal suggestions to assessors and insurers would be:
- Acknowledgement leading to recognition is a great start, and
Treat the claimant as an adult. If issues arise, raise them openly and respectfully so the claimant knows what is going on.
Do not lock them out; work on the issue together.
A bad feeling about a claim, the presence of red flags or “It just doesn’t add up” gives a reason for prudent enquiries - not for rampant and wholesale investigation.
Use an intermediary
An assessor once said to me, “I like to have direct access to my claimants.”
Direct access is a two-edged sword.
If the claimant is emotionally involved, and it is understandable they will be, there is merit in working through a non-emotionally involved and experienced intermediary such as the claimant’s adviser.
Understand the policy
Don’t try to correct policy errors at the time of claim.
“I know our contract may say that, but that is not what is intended.”
Unfortunately, that is not the claimant’s problem. Take it up with the product manager.
An important point for insurers to consider: maybe we need an environment that enables and encourages feedback.
Dare I suggest that we do not have it at the moment.
But most importantly...
There is an acknowledged shortage of claims assessors out there. As a result, I understand there is considerable inter-company movement and also an urgency about training.
Let’s think about that for a moment – training.
Here we have a situation where claims assessors are being given direct access to claimants, who are likely operating under a physical or psychological disadvantage.
The assessor can do many things including:
- Require them to supply information that may be of the most private and sensitive nature;
- Require them to attend for additional medical examinations and lengthy interviews with complete strangers; and
- Delay or even suspend the claimant’s ability to support themselves and their family.
Relevant and robust training is absolutely essential, in areas such as:
- The correct interpretation of policy wording;
- Historical contract development;
- Written and verbal communication skills, and
- Negotiation skills.
Matters to consider in regards to training might include:
- Should there be across the industry training standards?;
- Should standards be made public?;
- Should there be formal testing and passing of competencies prior to gaining access to claimants?;
- Should there be an industry-funded, independent overseeing organisation?;
- Should there be ongoing competency requirements.
Assessors no doubt want and deserve to be considered as trained professionals.
Well, so be it – and so be it in regards to the remuneration they should be subsequently paid.
Advisers recommend and put in place billions of dollars in risk insurance protection every year.
Insurers pay out billions in claims.
If this is not the perfect environment for an industry to be universally loved, I do not know what is.
It’s about time we set about harnessing that potential in part by recognising and eradicating behaviours that are dragging the industry reputation down and robbing some claimants of the peace of mind promised to them.
Col Fullagar is the principal of Integrity Resolutions Pty Ltd.