Finance Finance News Commonwealth Bank boss accused of ‘cover-up’

Commonwealth Bank boss accused of ‘cover-up’

ian narev
Ian Narev fronts a second round of questioning on Tuesday. Photo: AAP
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The CommInsure scandal continues to plague the Commonwealth Bank, with CEO Ian Narev copping heavy criticism from Labor and the Coalition for allegedly covering up the crafty ways the bank dodges insurance claims.

Liberal chair David Coleman and Labor deputy chair Matt Thistlethwaite alternated between stunned silence, sarcasm and rage at Tuesday’s economics committee hearing, as they probed whether CommInsure, one of the nation’s largest insurers, has been ripping off sick and dying customers.

Both wanted to cause the bank maximum embarrassment: Mr Coleman to negate any need for a royal commission, Mr Thistlethwaite to make one inescapable.

“A bit novel” is how Mr Coleman described, with dripping sarcasm, the way CBA cleared itself by paying Deloitte to investigate CommInsure  — with terms of reference written by the CommInsure board.

Mr Narev said prudential regulator APRA had described the report as “robust and independent”. He refused to say how much his bank paid Deloitte, saying that information was “commercial in confidence”.

The Deloitte report, released last week, found no “systemic issues” or “cultural issues”, despite not speaking to any victims or to Dr Benjamin Koh, the whistleblower who exposed the scandal.

CBA commissioned it last year after a joint investigation by Fairfax Media and the ABC alleged that CommInsure doctors were being pressured to change their diagnoses, and that claims from sick and dying customers, including former CBA staff, were being denied.

Two earlier reviews, by DLA Piper and Ernst & Young, also exonerated the firm. But Mr Narev refused to make their full text public, saying they were covered by legal privilege in order to protect internal whistleblowers.

Mr Thistlethwaite accused the bank of perpetrating a “cover-up”.

He pointed out that Deloitte reviewed 98 per cent of death claims, but only 10 per cent of total and permanent disability (TPD) claims, which have a far higher denial rate. He accused Mr Narev of “stacking the figures”.

Mr Narev stuck to his “robust and independent” line, prompting Labor’s man to slam it as a “cover-up” and to say it was “obnoxious” and “ridiculous” that the report did not interview victims.

“You find someone that you say is independent to hide behind. You find an organisation to hide behind to back you up,” he said to Mr Narev.

“You claim legal privilege on documents that would otherwise prove cases against you. It’s more of this cover-up. It’s the case that nothing’s changed.”

And he went on.

“Have you ever seen [the TV show] Yes Minister? This case reminds me of Jim Hacker as the Minister for Health visiting a hospital that has no patients. St Edwards, I think the hospital was called. You should call this a St Edwards report. It’s ridiculous that you didn’t interview any customers. It beggars belief.”

Mr Narev stayed silent through this tirade, but he leapt to defend his bank’s position that a royal commission would undermine the industry and hurt the economy by making it harder for the banks to borrow money from overseas.

“The message that the convening of a royal commission would send about policy makers over the last decade, regulators over the last decade, bank management and governments over the past decade would not be positive for the industry, would not be positive for strength and would not be positive for the perception of our industry as unquestionably strong.”

Mr Thistlethwaite put it to the bank boss that surely it would be easier for a royal commission to deal with all these allegations at once, rather than piecemeal, at great expense to the bank.

Who do you believe?

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