Did TAL incentivise managers to deny claims?
TAL has today faced rigorous questioning by the Royal Commission into the Banking, Superannuation and Financial Services Industry on whether case managers and senior staff were incentivised to deny claims as quickly as possible.
Senior Counsel assisting the Commission, Rowena Orr QC, introduced evidence suggesting that a key performance indicator (KPI) for senior case managers was declining claims, contending that this was “a driver for the poor conduct” observed in this round of hearings.
TAL general manager, Loraine Van Eeden, said that she could not comment on that suggestion, “as I do not see any rewarding or benefits paid to people based on this [declining claims]”. She was unable to confirm any of the KPIs for case managers at the time of the conduct the evidence referenced.
Documents tabled describing the responsibilities of case managers referenced bringing claims to an end as quickly as possible however, with Commissioner Kenneth Hayne QC suggesting that the case manager’s behaviour in the case study introduced by Orr was in aid of, and for which they would likely be rewarded.
While Van Eeden agreed that that was why the manager acted how they did, she said she couldn’t comment on whether it was rewarded.
“The fact that you can’t comment on it leads me to infer that you, being the witness put forward by TAL, that is their expectation when I see in the 2015 documents that that is the way in which people were awarded after these events,” Hayne said.
Orr validly questioned whether Van Eeden, whom TAL had “assured the Commission was the best person” to speak on the issues being addressed, could in fact provide answers to the inquiry.
AUTHOR
Hannah Wootton
Recommended for you
Policy and advocacy specialist Benjamin Marshan has left the Council of Australian Life Insurers after less than a year, having joined in March from the Financial Planning Association of Australia.
The declining volume of risk advisers meant KPMG has found a rising lapse rate for insurance policies arranged by independent financial advisers, particularly in the TPD and death cover space.
The Life Insurance Code of Practice has transferred from the Financial Services Council to the Council of Australian Life Insurers.
The firm has announced it will no longer be writing new life insurance policies in the retail advised and corporate group insurance channels, citing a declining market and risk adviser numbers.
