Financial Services Council Responds to ASIC TPD Report With New, Up to Date Data
In response to ASIC's report 'Holes in the safety net: A review of TPD insurance claims', based on claims data and files dating back from 2016/17, the
FSC CEO
"The 2018 data tells a very different story and ASIC's report serves to highlight the substantial progress the life insurance industry has made in the last couple of years.
"Data to the end of 2018 shows 88 per cent of TPD claims are paid in the first instance and higher at 91 per cent for mental health TPD claims. This includes claims against all definitions, including activities of daily living (ADLs), an initiative from the international medical community.
"FSC data for 2018 assessed a total of 11,427 TPD claims, of which 11,008 were assessed against an occupational definition, and only 419 or 3.6 per cent were assessed using either a non-occupational or ADL definition.
"What this shows is that non-occupational definitions such as ADLs are almost always used as part of a hierarchy of definitions in group insurance in super. ADLs then only apply in the tiny proportion of TPD claims where a definition higher up the hierarchy can't be used. This can be because, for example, the person isn't in paid employment so a more generous occupational definition has no relevance.
"TPD claims are significantly more complex to assess than other life insurance claims because they require a judgment as to whether or not the person is expected to work ever again. Given this, all life insurers are committed to ensuring at peak times of vulnerability, Australians feel safe and supported, without financial stress.
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Subsequent to ASIC's review, the Life Insurance Code of Practice (The Code) now provides additional consumer protections at claim interviews and for surveillance to ensure claims are not withdrawn for inappropriate reasons.
Since the introduction of the Code, data from the Life Code Compliance Committee shows 92 per cent of all lump sum claims in the year to
"It is also important to note that group life insurance through superannuation offers better value for money than any other type of insurance offered anywhere else in the world. With more than
"Even though data is a good historical way of looking at claims outcomes, when it comes to assessing claims, each one is unique and must be assessed on the individual circumstances. If a person is dissatisfied with the outcome, they are encouraged to lodge an appeal with the
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