BT outs itself as the insurer that denied four out of ten TPD claims
BT Financial Group outed itself over the weekend as the life insurer cited by the Australian Securities and Investments Commission for denying 37 per cent of its total and permanent disability claims.ASIC released a review of life insurance industry claims handling last week, revealing "issues of concern" in relation to declined claim rates for particular types of products, notably TPD and trauma.The denied claim rate for TPD was 16 per cent, compared with four per cent for life cover. ASIC said one insurer has a denied claim rate of 37 per cent for TPD policies.BT acknowledged the denial rate but said in a media release that the figures "should be treated with caution and were not comparable."BT said: "ASIC said at its recent appearance at the House of Representatives Economics Committee that the data that has been provided by industry participants is not consistent. Any comparisons would be misleading and would not provide accurate information to consumers, particularly when they are comparing policies."In BT's case the data includes some claims that were lodged by people who were not insured with us at the time of their injury or illness, and some claims by customers who were paid under other parts of their policy, such as income protection."ASIC was moved by the evidence uncovered in its review to introduce a new reporting regime that will require insurers to report on claims paid, claims denied, claims handling timeframes and details of disputes. Data will be made available on an industry and individual insurer basis.In addition to the introduction of a new reporting regime, ASIC has recommended the Government amend the Corporations Act to provide specific coverage of claims handling.ASIC said: "An issue arises when a policy holder's reasonable expectations about policy coverage do not align with the technical wording in the policy.??"A key challenge for the sector is how to deal with that small number of claims that may not technically be covered under the 'fine print', but under any reasonable consumer or community expectation should be paid."