The clean bill of health delivered to CommInsure’s insurance practices by consultancy group Deloitte has been marred by inadequate investigation of the total and permanent disability (TPD) insurance claims inside superannuation funds, according to plaintiff lawyers Maurice Blackburn.
Josh Mennen, the law firm’s superannuation and insurance principal, told The New Daily that “there looks to have been a bit of anti-selection in the report”.
“In the area of group TPD, which has been the biggest problem area for the business,” Mr Mennen said. “Only 10 per cent of the total number of TPD claims being reviewed by the company were selected for scrutiny by Deloitte.”
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.
Following the release of the Deloitte report, and two others by DLA Piper and Ernst & Young, looking at different parts of the business, the CommInsure board concluded “there is nothing to support the concerns of wilful or widespread misconduct”.
The Deloitte review looked at a sample of claims that had been declined by CommInsure over the five years to April 2016, as the following table shows.
But Maurice Blackburn says TPD claims within super were under-represented in the review. “If you look at the figures you find that 98 per cent of retail death claims, the least contested area, were reviewed by Deloitte compared to only 10 per cent of TPD claims which had by far the highest sample referred to in the report,” Mr Mennen said.
That was despite TPD being “notoriously well-known for having the highest denial rate across the industry”, Mr Mennen said.
Opposition Financial Services spokesperson, Senator Katy Gallagher, said the report, paid for by CommInsure’s owner, the Commonwealth Bank, was published “without interviewing a single customer”. That was “simply inadequate and offensive to the victims of this scandal”, she said.
Deloitte, in its report, said its work was carried out in two parts:
- A review of the initial decision to decline the claim based on our assessment process.
- Review of CMLA’s (CommInsure’s) reassessment of the claims identified in stage one to determine any customer impact.
Mr Mennen said that process was inadequate. “They didn’t speak to any claims staff or whistleblowers. Looking at the files won’t tell you if a doctor has been pressured to reject a claim; there won’t be a note in the file saying that.”
A spokesman for Financial Services Minister Kelly O’Dwyer said the minister could not comment on the Deloitte report as it was not a government report. “However the government has asked ASIC to report into the allegations about CommInsure after they became public.”
“That report is expected within the next month,” the spokesman said.
The Deloitte report has been handed to ASIC and will make up part of the regulator’s investigations into CommInsure. The other two reports referred to earlier have also gone to ASIC.
Details of those reviews have not been released but one is believed to deal with whistleblowers and their treatment.
Insurance regulator APRA also looked into the scandals surrounding CommInsure, with the regulator meeting and questioning the authors of the three reviews.
“APRA is satisfied that the reviews are robust, complete and independent” and will now “focus on CommInsure’s implementation of the reports’ recommendations”, APRA member Geoff Summerhayes told a Parliamentary Committee last Friday.
“We have also met with the whistleblower (from inside CommInsure) who brought the issues to light; and are considering whether the whistleblowing provisions in the Life Insurance Act designed to prevent the identification and victimisation of whistleblowers have been adhered to,” he said.
“We are now seeking independent advice on these matters in order to conclude our current inquiries.”