No need for independent claims body

31 March 2017
| By Jassmyn |
image
image
expand image

The life insurance claims process should be simple and informative enough and an independent body to assess claims is not needed, a panel believes.

Speaking at the Financial Services Council’s (FSC’s) Life Insurance conference on Thursday, Financial Rights Legal Centre principal solicitor, Alexandra Kelly said an additional layer of assistance for claims would add more confusion to consumers.

“For a consumer, what is the role of what party? Are you an advocate? An information provider? Who will fund them? There’s too many complexities will be added into in respect of creating such an entity,” Kelly said.

“The claims process should be an in-house process that should be so simple anyone could do it. It shouldn’t be at a point where the claims form is so difficult, confusing, and upsetting that claimants need support for that. If they do need support why can’t the insurer provide that support? So that message should be clear about what the insurer wants rather than creating an additional layer of an entity.”

Kelly said consumers would not buy into an industry scheme as it would be seen as another avenue of trying to discourage consumers to make a claim.

“If a consumer goes along to this entity and they say ‘no we don’t think you can make a claim’ the consumer will still want advice from someone independent to ask ‘is that right?’ and then we would get into more confusion from the consumer,” she said.

“We should be focusing on getting to a point where the claims process is so informative and consumers are assisted along the way so that they understand that ‘no, I’m not entitled to a claim and I understand the reasons why’ or ‘I am entitled and I completely understand where I’m at with my obligation’. I think that should be directed for the insurers themselves.”

Also speaking on the panel, the corporate regulator’s deputy chair, Peter Kell said if insurers adhered to all the requirements set out in the Code of Practice, and adhered not only to the technical side but also the spirit and the principles set out, and avoided defaulting to the expectation provisions as far as possible, then consumers would not feel the need to go to lawyers so often.

“That ought to be one of the aims of the code to improve consumer experience. Too often it is nowhere near as good as it should be,” he said.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

GG

So shareholders lose a dividend plus have seen the erosion of value. Qantas decides to clawback remuneration from Alan ...

2 months 1 week ago
Denise Baker

This is why I left my last position. There was no interest in giving the client quality time, it was all about bumping ...

2 months 1 week ago
gonski

So the Hayne Royal Commission has left us with this. What a sad day for the financial planning industry. Clearly most ...

2 months 1 week ago

A Sydney-based financial adviser has been banned from providing financial services in the interest of consumer protection after failing to act on conduct concerns. ...

3 weeks 3 days ago

ASIC has cancelled the AFSL of a $250 million Sydney fund manager, one of two AFSL cancellations announced by the corporate regulator....

3 weeks 1 day ago

Having divested its advice business in August, AMP is undergoing restructuring in at least four other departments amid a cost simplification program....

2 weeks 5 days ago