When you take out insurance – whether it's for your home, the car or your health – you expect an insurer to pay out should you have a legitimate claim. It's something CommInsure customers certainly expected. After all, their insurer is part of the Commonwealth Bank of Australia (CBA). What could go wrong?
This month, CommInsure came under immense scrutiny after whistleblowers unveiled a culture of denying or delaying legitimate claims (some for sick or dying policyholders), allegations the Australian Securities and Investment Commission is urgently investigating.
After all, if an insurer can put off making an assessment and fulfilling their obligation until a terminally sick person has died, it can save a lot of money. That is the allegation that has been levelled at CommInsure by none other than its former chief medical officer, Dr Benjamin Koh.
david rowe (@roweafr) March 8, 2016
What's happened to CommInsure?
Allegations by Dr Koh to the ABC were that the insurer would "blatantly" request doctors change or delete medical records so the insurer could seek "another opinion that's more favourable," the Sydney Morning Herald (SMH) reported.
In a March 5 media release, CBA's Chief Executive Officer Ian Narev identified how life insurance claims need to be dealt with "as quickly and as fairly as possible", though admitted that the bank "failed to meet that responsibility."
A 22-minute interview with Mr Narev on 4 Corners posed the question up front. Was the insurer aware that doctors were "bullied" to change medical records to avoid the bank's insurance arm paying claims. The CEO said the bank was conscious of "individual cases" where the quality of insurance has not been good enough.
smh.com.au (@smh) March 7, 2016
Was it just a few bad apples?
However, shareholders are quick to blame bad apples in cases like this. Surely a bank with 46,000 employees has a few unsavoury characters looking to boost their profits in spite of all else, right?
The excuse comes up time and time again. The truth is that in this case, as well as the financial planning scandal of 2014, CBA senior staff alerted their managers of malpractice and were subsequently sacked, SMH reports. You can't blame bad apples while getting rid of the good ones.
Reporter John Addis continued. "Bad apples will soon fill every truck, revealing that this is a systemic problem, one where a rotten, sales-driven culture harms vulnerable people in the most brutal way imaginable."
The SMH has been scathing in its coverage of the story – and rightly so – asking the big questions: Why is scandal hitting Australia's biggest bank yet again, and is CBA an unethical stock? At the end of the day, none of the answers will bring people back to life and give them the means they deserve to live out the last of their days in financial comfort.