ASIC is currently conducting an industry-wide review of life insurance claims-handling practice which commenced in March 2016.
Claims-handling in the life insurance industry is being reviewed to examine:
- whether there are any systemic issues across the industry that require further scrutiny (for example, policy definitions (and their interpretation), timeliness of claims handling, evidence required for claims, and reasons for claims denials), and
- whether there are any particular insurers’ practices and businesses that require further scrutiny.
The review is informed by internal and external data sources including external dispute resolution scheme data, information from consumer groups about life insurance claims and casework, targeted product disclosure statement reviews, and misconduct and breach reports to ASIC. ASIC has also contacted over a dozen insurers to obtain information for the review.
Many life insurers have also initiated a review of their claims-handling practices. If conducted properly, such reviews can help provide insurers with assurance that the concerns that have been raised publicly do not arise in their own businesses, or to respond promptly and comprehensively where any such concerns are identified. ASIC is in discussions with these insurers about the scope and progress of these reviews and expect that these reviews will help inform them of any significant or additional matters that require further scrutiny.
ASIC’s initial industry review is an important first step to identify where specific issues occur on an industry-wide basis. It is anticipated that this initial review will be completed and a public report will be released later this year. This review and the work being undertaken by individual insurers is important to help tackle concerns about industry practices and to ensure that consumers can have confidence about the products they purchase.