Report denies insurers greater say in worker rehabilitation

25 October 2018
Lawyers have welcomed a parliamentary committee report that has slapped down a push from insurers for increased involvement in worker rehabilitation, saying the Royal Commission had made clear insurers had a long way to go to rebuild trust with consumers without being handed expanded powers.

Maurice Blackburn Principal Josh Mennen said the Parliamentary Joint Committee’s report had outlined a series of sensible findings and recommendations that would help to ensure consumers were protected from potential insurer overreach.

“This push from the Financial Services Council (FSC) has always been a Trojan horse that risks being used to go behind privacy and other legal protections to force sick claimants back to work and to reduce claims needing to be paid out,” Mr Mennen said.

“We are pleased that the Committee’s report has also seen this push for what it is, noting that insurers are a long way off having the social licence to be trusted with any sort of expanded powers such as those proposed.

“Insurers need to focus on getting their house in order rather than trying to have a greater say in worker rehabilitation, including addressing concerns raised by the Royal Commission.

“The FSC sought to argue through this process that life insurers would not cease income protection or total and permanent disability (TPD) payments because a customer refuses treatment offered, but that claim rings hollow given some insurers are already doing this.

“This includes SunSuper and AIA who have built into their insurance offerings the right to refuse TPD instalment payments, including conditions for payment that the insured ‘fully participate in any Occupational Rehabilitation Program required by the Fund’.

“If insurers are genuine about wanting to help claimants, then the best way they can do that is by assessing people’s claims efficiently and fairly, without delays.

“They must demonstrate claimants are a priority before anyone can take seriously the notion that they can get claimants back to work early without compromising their long-term health.

“We are pleased the Committee has acknowledged many of these same concerns, including recommending that ASIC undertake a full investigation of the use of in-house rehabilitation services within the industry - this will allow an examination of many of harsh insurer policies the FSC is seeking to expand, including excessive surveillance of claimants.

“Among its many failings, the FSC proposal was hopelessly inadequate as it did not propose any regulatory framework to ensure consumers’ medical and legal rights were protected, and we are greatly relieved the Committee have helped to address these concerns,” he said.