Group insurers on notice on claims handling
Insurers providing group insurance to superannuation funds delivering MySuper products may have to provide extensive data on how they handle claims by members, including claims paid and claims denied.
That is one of the key elements of an Australian Prudential Regulation Authority (APRA) draft prudential regulation guide covering group insurance arrangements with respect to MySuper products, with the regulator making it clear that it regards as "good practice" insurers "articulating" their claims philosophy.
"APRA considers it to be good practice for the insurer to support the articulation of its claims philosophy with indicators such as:
(a) the insurer's rate of rejection of claims;
(b) the insurer's record of claims decisions being overturned by the Superannuation Complaints Tribunal or a court;
(c) the insurer's processes for monitoring the quality of claims decisions; and
(d) the training and skills of the insurer's claims assessors."
The APRA draft prudential regulation guide said that other information that might be relevant included ‘de-identified' details of specific examples of claims paid and claims denied.
Elsewhere in the draft prudential guide, APRA points to group insurers needing to have significant risk management procedures in place including the ability to recognise trends and the implications of changing social attitudes.
"Examples of issues that could result in adverse trends include changes to benefit designs (including increases to automatic acceptance limits), changes to the membership profile, increases in the level of awareness by beneficiaries of their entitlement to claim insured benefits, changing social attitudes to disability (eg, in the area of mental health), greater involvement of lawyers in the claims process, increasing delays in the reporting of claims and differences in claims philosophies between previous and current insurers," it said.
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