The past 24 hours has seen further fallout from the Fairfax/Four Corners led exposé of CommInsure, with calls for a wide ranging royal commission into the insurance industry. These calls have been backed by both the federal opposition and the Australian Shareholders Association (ASA), the peak representative body for retail shareholders. The government is yet to commit one way or the other. However, Assistant Treasurer Kelly O’Dwyer is seeking an urgent report from ASIC into both the incidents raised by the investigation (CommInsure specifically), and the insurance industry more broadly.
Yesterday, the ASA’s Chairman, Diana D’Ambra launched a scathing attack on the Commonwealth Bank’s ethics and integrity following reports of ‘suspect’ practices in handling of life insurance / TPD claims, describing the recent revelations as ‘very disturbing’. She also noted the incidence of (wrongfully) declined claims appeared to have been ‘exacerbated by the fact that financial advisers are selling these products to customers who do not fully understand the policy carve-outs until it is too late’ and called on directors and management to take responsibility to prevent such practices from occurring.
The Commonwealth Bank has since announced that it will be reviewing its superannuation and trauma coverage and introducing an independent panel to assess complex claims which have been declined.