Life insurers in Royal Commission’s sights

Most of the major life insurance companies received letters from the Royal Commission into alleged misconduct in Australia's banking, superannuation and financial services industry within four days of the Governor-General signing the necessary Letters Patent.

Money Management has now confirmed that while the Treasurer, Scott Morrison announced the signing of the Letters Patent for the Royal Commission on Monday, 18 December, last year, the major insurers, banks and a number of industry superannuation funds had received letters from the Royal Commission by Friday, 22 December.

The letters were dispatched despite the fact the Commissioner, Kenneth Hayne QC had only just been formally confirmed in the role and despite the fact no announcements had been made then, or subsequently, with regard to the formation of a Royal Commission secretariat.

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As late as yesterday, the Royal Commission web site stated: “The Royal Commission is in the early stages of being established.”

Copies of the correspondence sent to superannuation funds, banks and insurers and sighted by Money Management suggest that the Royal Commission managed to issue what amounted to largely a “form letter” with the documents varying to accommodate the types of business being conducted.

Thus, superannuation funds have been asked a series of questions specific to the Superannuation Industry (Supervision) Act 1993, particularly the use of member funds, while insurance companies have been asked questions going to their relationships with clients, including superannuation funds.

In all cases, those receiving the correspondence, have been asked to account for their activities over the past 10 years.




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This is great, wobble wobble in those boots you big greedy instos, here comes the broom! All these dodgy little backhander payments from life insurance companies to super funds for "claims experience" will finally be out in the open. Sucked in FSC, you have no where to hide now, same with the ISA they will all be caught up in this. About time.

The un-adviserd insurance offerings and their claims process are a rort. Id like the royal commission to look into their claims handling processes and the relationships they have formed with unscrupulous lawyers from the major firms. How often do the insurers rip off clients by declining claims they know they would have to pay out if it went to court only to settle out of court when a lawyer gets involved, there by reducing the claim amount and forcing the claimant to pay for a lawyer. The lawyers under the no win no fee sales strategy get the clients to sign that if there is a settlement as this counts as a win meaning they never go to court as they know the insurer will settle out of court and they will still get their fee.

Look into the Ombudsmans findings in the Workcover report where this exact thing happens and then relate that to an entirely private insurer. What a scam, how much do the insurers spend on lawyers fighting fair claims?

THIS NEEDS TO STOP.

But when you get a team of lawyers looking into dodgy practices and collusion between insurers and lawyers i doubt anything will happen. Lawyers will always make laws to protect lawyers and keep the money train scams rolling

I hope someone from the Royal Commission is reading this.
Please explain:
How a dodgy cartel namely the FSC (Financial Services Council) can hide the facts on the real adviser "churn" numbers after ASIC's flawed report 413 and until after the LIF was passed. The real facts showing that adviser churn was in fact not an industry issue.
How the same cartel members can fix commissions which will mean customers now have to pay for advice.
How the same cartel members all started raising premiums on existing customers at the same times and at similar levels.
How the same cartel members are now still increasing existing customers premiums but are reducing premiums on new business which will actually create a churn issue which was not there in the fist place.
How the same cartel members have been funding the industry bodies (AFA and FPA) to get what they wanted at the expense of customers and advisers.
How the same cartel members have been increasing direct products, typically 40% more expensive and little underwriting with junk definitions to mean less claims paid.
How the same cartel members have been lobbying parliament to try and be able to change legacy products to reduce claims and increase profits.
I would like to see Sally Loane and the other insurer CEO's on the stand to please explain.

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