No Commonwealth Bank staff member has been sacked over scandals involving its insurance arm, the bank has conceded.
Commonwealth Bank chief executive officer Ian Narev is the first bank boss being grilled by a federal parliamentary inquiry into the sector.
A joint ABC-Fairfax Media investigation in March revealed CommInsure had rejected multiple claims despite evidence they were legitimate.
Four Corners earlier this year highlighted CommInsure’s denial of heart attack claims by using an outdated definition buried in the fine print of policy documents.
More than six months on, Mr Narev said no one had been fired.
“There are certainly individuals who we know enough about that have had discussions with them, have had some consequences related to remuneration,” he told the House of Representatives Economics Committee.
“At this stage we have not had individuals terminated as a result of this because we have not seen the need to do that.
“If we do, we’ve got very clear principles on it, we will make sure that happens.”
Asked about 7.30‘s report on Monday night about CommInsure ignoring a coroner’s findings and refusing a life insurance payout, Mr Narev said it was a “concern”.
“If you’re any individual customer such as the one who appeared last night, such as others that I’ve met, the situation is one that’s deserving of a high degree of concern,” he said.
“I think we’re doing a lot better at listening to the cases of individual customers and if you’re one of those it’s absolutely critical that you have avenues that are easily accessible, cost effective where you can get efficient redress and we’re committed to making that happen.”
Mr Narev also told the hearing the bank’s insurance arm, CommInsure, had since changed its definition of heart attacks and retrospectively paid 17 account holders.
‘Sorry for the pain’
The Commonwealth chief also faced questions about the company’s financial planning scandal, which saw customers lose hundreds of millions of dollars.
He said it was likely more customers would be able to access compensation.
“Critics will paint these as signs of ongoing problems,” he said.
“Actually they are signs of how serious we are about fairness.”
Mr Narev said it had reviewed the financial advice given to 6000 customers as part of its response to financial planning scandals.
He conceded the advice provided in more than 10 per cent of cases was not correct, resulting in those customers receiving $11 million.
Mr Narev said the “vast majority” of staff were working to do the best for customers but he also acknowledged they needed to “do better”.
‘An awful situation’
The bank’s chief risk officer, David Cohen, admitted the bank made mistakes in the case of Emmaline Matthews, who died last year.
Ms Matthews and her husband, Rainer, applied for hardship assistance after she was diagnosed with terminal cancer but were rejected.
“It’s an awful situation, it’s an awful situation,” Mr Cohen said.
“I can only imagine Ms Matthews getting news like that from that bank at a time of such dire need would’ve been absolutely horrific.
“So what I can say is that no, that is not how we seek to deal with our customers at all and I’m very sorry that it did happen in this case.”
Narev defends bank’s massive profits
Mr Narev began the hearing by offering a defence of the general profit levels enjoyed by the bank.
“It is correct that our returns on equity are higher than many banks in other developed markets,” he told the committee.
“But in most of those markets, banks have failed, nearly failed or struggled severely.
“Our profits are at a level that enable us to keep the confidence of global funders who play a critical role in our ability to consistently extend credit.”