Insurer Compensates Claimants in Wake of Transition Issues

3

The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.

The Life Code Compliance Committee reported that the insurer failed to meet the necessary timelines for handling claims, resulting in 3580 breaches between November 2022 and August last year. This failure predominantly affected policyholders with income protection and total permanent disability coverage from a superannuation fund.

The issue arose following the insurer and the fund's decision to transfer claims processing responsibilities from a third-party service provider back to the insurer. The transition period saw numerous staffing issues at the third-party organization, which critically hampered its ability to meet the code's stipulated time frames for claims processing, the committee's investigation revealed.

The committee's findings indicated that the insurer violated several provisions of the claims handling process defined in the code. Specifically, the insurer failed to:

• Inform customers about the claims process within 10 business days;
• Provide updates on the progress of claims every 20 working days;
• Notify customers in advance when their income protection claim payments were nearing their end.

"Insurers must ensure their change management plans allocate adequate resources to meet service standards and prescribed time frames," the determination stated. "Utilizing effective risk mitigation strategies is crucial in countering potential issues, thereby protecting against disruptions and safeguarding customer interests during transitions."

Post-transition, the insurer took over claims management on July 1 of the previous year and initiated several steps to bolster compliance with the code. The company formed new teams and conducted training focusing on code requirements and system utilization.

"The insurer has augmented its oversight of claims processing by increasing case conferencing, setting up weekly performance tracking, and holding monthly governance meetings," the determination noted. "These improvements led to noticeable increases in compliance rates regarding time frame obligations, which became more stable starting in December."

These measures indicate significant shifts in how the insurer manages and processes claims, fostering better service standards and accountability.

Published:Wednesday, 4th Sep 2024
Source: Paige Estritori

Please Note: If this information affects you, seek advice from a licensed professional.

Share this news item:

Insurance News

Clear

Comprehensive Indemnity Insurance Now Available for Private Midwives

28 Dec 2025: Paige Estritori

As of 1 July 2025, the Department of Health, Disability and Ageing has introduced a professional indemnity insurance (PII) product specifically designed for midwives providing intrapartum care. This development, under the Midwife Professional Indemnity Scheme (MPIS), ensures that private midwifery practitioners now have access to insurance coverage encompassing all facets of their practice, including intrapartum services. - read more

Australian Surgeons Confront Escalating Indemnity Insurance Costs

28 Dec 2025: Paige Estritori

In recent developments within the Australian healthcare sector, a significant number of bariatric surgeons are contemplating the future of their medical practices due to a substantial increase in indemnity insurance premiums and a rising incidence of legal claims. This trend poses potential challenges to the accessibility of obesity-related procedures for patients across the country. - read more

Health Insurance Premiums Expected to Surge by Over 10% in 2026

28 Dec 2025: Paige Estritori

Recent projections indicate that global health insurance costs are set to rise by 10.3% in 2026, marking a continuation of the upward trend observed in recent years. This follows a 10% increase in 2025 and a 9.5% rise in 2024, underscoring the sustained inflationary pressures faced by insurers and employer-sponsored health plans worldwide. - read more

Comprehensive Insurance Solutions for Fitness Professionals by Marsh

28 Dec 2025: Paige Estritori

Marsh, a leading insurance broker, offers tailored insurance solutions designed specifically for fitness professionals across Australia. Recognising the unique risks associated with the fitness industry, Marsh provides comprehensive coverage options to safeguard personal trainers, gym owners, and other fitness practitioners. - read more

AUSactive's Professional Plus Membership: Comprehensive Support for Fitness Professionals

28 Dec 2025: Paige Estritori

AUSactive, Australia's peak body for the exercise and active health sector, has introduced the Professional Plus Membership, a comprehensive package designed to support fitness professionals in their careers. This membership combines the benefits of AUSactive's professional membership with an exclusive insurance policy tailored for those delivering fitness, exercise, and active health activities. - read more

Click for more Insurance News