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In April 2016, ASIC commenced an investigation into the life insurance business of The Colonial Mutual Life Assurance Society Limited, trading as CommInsure.
The investigation relates to a range of concerns regarding CommInsure's life insurance business, including its claims handling practices and procedures. The investigation commenced following concerns raised in the media earlier this year.
ASIC has carried out an "extensive range of enquiries into the concerns raised,” according to a statement by the regulator. “Enquiries are ongoing and no comment on potential outcomes will be made at this time. Given the wide ranging and often complex nature of these matters, ASIC's investigation is anticipated to continue for some time. The investigation remains a priority for ASIC and we will provide public updates where appropriate as the matter progresses.”
ASIC noted that it has worked closely with APRA during the investigation.
As part of the investigation so far, ASIC has obtained approximately 60,000 documents for consideration, interviewed a range of individuals, obtained external legal advice and engaged extensively with CommInsure and CommInsure's independent reviewers. In addition, ASIC has liaised with the Financial Ombudsman Service and the Superannuation Complaints Tribunal in relation to CommInsure matters.
Yesterday ASIC released Report 498, Life insurance claims: An industry review, which identifies a number of areas as potential opportunities for law reform in relation to life insurance.
“Separately to ASIC's investigation, CommInsure has commenced a number of independent reviews, including in relation to declined claims, its life insurance claims handling practices and in relation to ethical concerns raised in the media,” ASIC said.
“ASIC has been engaging closely with CommInsure concerning the scope and findings of these reviews. ASIC will continue to monitor the scope and conduct of these reviews and will continue to liaise closely with APRA during this process.”
In March 2016, CommInsure announced that it would update the definitions of heart attack and severe rheumatoid arthritis in its trauma products, and reassess past claims under those definitions going back to 11 May 2014. According to ASIC, CommInsure advises it has paid benefits for 17 claims, totalling approximately $2.5 million.
[Related: ING Direct to refund $5.38m in super fees]