Name and shame bad insurers says lawyer
Plaintiff law firm, Maurice Blackburn, has called for the naming and shaming of the life insurance companies identified by the Australian Securities and Investments Commission (ASIC) as declining up to 37 per cent of claims.
Maurice Black principal, Josh Mennen, said the ASIC report underlined the need for a Royal Commission and an enforceable code of conduct but in the meantime the public had a right to know who the worst offenders were.
"….the ASIC report again shows that there remain serious issues with respect to declined claims and claims handling, particularly in total and permanent disability (TPD claims), with some insurers declining up to 37 per cent of claims," he said.
"The report identifies that particular insurers remain a problem, but does not identify specific insurers against its findings. The public has a right to know who the worst offenders are."
Mennen was also harshly critical of the Financial Services Council's (FSC's) Life Insurance Code of Conduct, which he said could "best be described as having all the bite of a month-old lettuce".
"It is little more than a restatement of the law that fails to deal with deep cultural and systemic industry issues," he said.
"The public want real action; they do not want any more excuses or some greenery to hide behind."
"The FSC code also doesn't pass the litmus test — the many examples of mistreatment by insurers highlighted this year would not have been prevented if the FSC code had been in place," Mennen said.
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Policy and advocacy specialist Benjamin Marshan has left the Council of Australian Life Insurers after less than a year, having joined in March from the Financial Planning Association of Australia.
The declining volume of risk advisers meant KPMG has found a rising lapse rate for insurance policies arranged by independent financial advisers, particularly in the TPD and death cover space.
The Life Insurance Code of Practice has transferred from the Financial Services Council to the Council of Australian Life Insurers.
