CommInsure hits back at criticism of its Deloitte review

Rod Myer
Mar 06, 2017, updated Mar 06, 2017

CBA's Ms Spring hits back at CommInsure reveiw claims. Pic: AAP Photo:AAP

CommInsure has hit back at claims by lawyers Maurice Blackburn that its review into malpractice in its CommInsure life insurance arm carried out by consultancy Deloitte was inadequate.

But it did not address concerns that the review had sampled too small a number of rejected claims in the controversial total and permanent disability area.

The Deloitte review was released by CommInsure last week. It did not “identify any systemic issues relating to historically declined claims” nor “that the claims Handling processes were designed in a way that could systemically deliver poor customer outcomes,” Annabel Spring, a wealth executive with Commonwealth Bank (CommInsure’s owner) told the Joint Parliamentary Committee inquiry into Life Insurance.

“Now, we are not perfect and mistakes were identified. For those mistakes that were made, we apologise and we will make it right. Also, at our request, the Report suggested improvements to our claims processes which we are already implementing,” Ms Spring said.

In a separate release CommInsure responded specifically to Maurice Blackburn criticisms of the comprehensiveness of the Deloitte review and two others that weren’t released publicly.

Both regulators – ASIC and APRA – have been provided with all reports and reviews (Deloitte, DLA Piper and Ernst & Young). APRA stated it was “satisfied that the reviews are robust, complete and independent.”
We believe this work is the largest independent review of insurance claims ever conducted in Australian history.

CommInsure also canvassed Maurice Blackburn’s claims that “claims samples that have been referenced in the report are also questionable”.

It quoted Deloitte as saying that “given the level of coverage obtained by our sample we believe that the work performed is sufficient to have reasonably identified any matters that may systemically affect the declined claims populations”.

A large cohort of TPD claims were reviewed, over 200 and these were the largest number of such claims yet examined in such a review, the insurer stated. “Deloitte examined 21 per cent of declined claims in the last 5 years and 100 per cent of terminal illness claims over the past three years.

However CommInsure did not specifically address Maurice Blackburn’s concern on the number of TPD (total and permanent disability) claims reviewed.

The review examined “only 10 per cent of TPD claims which had by far the highest sample referred to in the report”, Maurice Blackburn insurance specialist Josh Mennen, told The New Daily last week.
That was despite TPD being “notoriously well-known for having the highest denial rate across the industry,” Mr Mennen said.

CommInsure also rejected claims that its definitions of illness and injury were out of date and that its customers and claims officers had not been contacted for the review

Deloitte was commissioned by CommInsure last year after media investigations revealed the insurer had rejected and delayed claims from sick and dying super fund members and claimed doctors had been pressured to change their diagnoses.

Claims about pressuring doctors were made by CommInsure’s former chief medical officer, Dr Benjamin Koh.