FSC proposal described as Trojan horse

FSC risk insurance Maurice Blackburn financial services council life/risk life/risk insurance law firm parliamentary joint committee on corporations and financial services parliamentary committee Josh Mennen Insurers rehabilitation Royal Commission total and permanent disability TPD AIA Sunsuper insurance australian securities and investments commission ASIC

26 October 2018
| By Mike |
image
image
expand image

The Financial Services Council’s (FSC’s) push for life/risk insurer involvement in worker rehabilitation was always a Trojan horse that risked getting behind privacy and other legal protections to force sick claimants back to work, according to plaintiff law firm, Maurice Blackburn.

Commenting on the decision of the Parliamentary Joint Committee on Corporations and Financial Services to recommend against the FSC and insurance company push, Maurice Blackburn principal, Josh Mennen said the insurers were a long way off having the social licence to be trusted with any sort of expanded such as those that were being proposed.

“Insurers need to focus on getting their house in order rather than trying to have a greater say in worker rehabilitation, including addressing concerns raised by the Royal Commission,” he said.

“The FSC sought to argue through this process that life insurers would not cease income protection or total and permanent disability (TPD) payments because a customer refuses treatment offered, but that claim rings hollow given some insurers are already doing this,” Mennen claimed.

“This includes Sunsuper and AIA who have built into their insurance offerings the right to refuse TPD instalment payments, including conditions for payment that the insured ‘‘fully participate in any Occupational Rehabilitation Program required by the Fund’.”

Mennen said that if insurers were genuine about wanting to help claimants, then the best way they could do that was by assessing people’s claims efficiently and fairly, without delays.

“They must demonstrate claimants are a priority before anyone can take seriously the notion that they can get claimants back to work early without compromising their long-term health.

“We are pleased the Committee has acknowledged many of these same concerns, including recommending that the Australian Securities and Investments Commission (ASIC) undertake a full investigation of the use of in-house rehabilitation services within the industry - this will allow an examination of many of harsh insurer policies the FSC is seeking to expand, including excessive surveillance of claimants,” he said

“Among its many failings, the FSC proposal was hopelessly inadequate as it did not propose any regulatory framework to ensure consumers’ medical and legal rights were protected, and we are greatly relieved the Committee have helped to address these concerns,” Mennen said.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

Interesting. Would be good to know the details of the StrategyOne deal....

4 days 1 hour ago

It’s astonishing to see the FAAA now pushing for more advisers by courting "career changers" and international recruits,...

3 weeks 2 days ago

increased professionalism within the industry - shouldn't that say, FAR register almost halving in the last 24 months he...

4 weeks 1 day ago

Insignia Financial has made four appointments, including three who have joined from TAL, to lead strategy and innovation in its retirement solutions for the MLC brand....

2 weeks 4 days ago

A former Brisbane financial adviser has been charged with 26 counts of dishonest conduct regarding a failure to disclose he would receive substantial commission payments ...

2 days 23 hours ago

Pinnacle Investment Management has announced it will acquire strategic interests in two international fund managers for $142 million....

2 days 2 hours ago