Life insurers’ push for law change a dangerous Trojan horse

Maurice Blackburn Lawyers

Leading insurance law firm, Maurice Blackburn Lawyers is warning insurers’ renewed calls for greater involvement in worker rehabilitation is part of a push to expand their powers so fewer claims will need to be paid out.

Maurice Blackburn Principal, Josh Mennen says the Financial Services Council (FSC) has this week revived its old campaign to change the law so insurers only need to pay the medical bills of a sick worker instead of paying the entire insurance claim.

“It’s deeply troubling that the FSC is seeking to re-agitate this issue at the peak of a pandemic crisis which is devastating the employment prospects of all Australians, but particularly those living with injury and illness,” Mr Mennen said.

“The FSC has itself acknowledged that the opportunities for disability insurance claimants to return to work are extremely limited under normal circumstances, let alone under the current economic crisis engulfing Australia.

“It’s therefore irresponsible to suggest that an insurer should be calling the shots on claimants medical treatment plans in an attempt to get them back into a severely diminished job market,” Mr Mennen said.

“What insurers should be instead focusing on is the ongoing and timely payment of legitimate claims so that disabled consumers can afford the medical and other support they need – and without the inappropriate interference of an insurer in those therapeutic relationship.”

Mr Mennen said the renewed lobbying comes on the back of reported statements of notional support for such a change by Superannuation and Financial Services Minister, Jane Hume.

“However, the same proposal for change was roundly rejected by a Parliamentary Joint Committee in 2018 which also recommended ASIC conduct a full investigation into the use of in-house rehabilitation services by insurers.

“It would be interesting to know if this ASIC review went ahead as recommended and whether the Minister’s stated support for the proposal is based on the review,” Mr Mennen said.

“The Parliamentary Joint Committee made a series of sensible findings and recommendations which would ensure that consumers were protected from potential insurer overreach.

“While it appears to be altruistic, the FSC’s campaign to change the law has always been a Trojan horse to push past the privacy and other legal rights of their disabled claimants and gain greater control over their medical treatment,” Mr Mennen said.

“Until the Committee’s recommendations have been faithfully completed and the findings of the ASIC investigation are released, then any calls for an expansion of a life insurer’s rights in the medical decisions of claimants is premature and unwarranted.”

/Public Release.