This is an HTML version of an attachment to the Freedom of Information request 'Life Insurance Industry Review/Investigation'.


 
 
 
 
 
 
Level 5, 100 Market Street, 
 
Sydney NSW 2000 
 
GPO Box 9827, Sydney NSW 2001 
Our Ref: 
17126/16 
DX 653 Sydney 
 
 
 
Telephone: +61 2 9911 2000 
24 May 2016 
Facsimile: +61 2 9911 2414 
 
www.asic.gov.au 
 
Mr Phillip Sweeney 
 
 
By email: xxxxxxxxxxxxxxxxxxxxxxxxx@xxxxxxxxxxx.xxx.xx 
 
 
Dear Mr Sweeney 
 
Request Under the Freedom of Information Act 1982  
For Access to Documents 
 
I refer to  your request under the Freedom of Information Act 1982 (FOI Act) received 
by this office on 29 April 2016 in which you sought access to the following document: 
 
The Deputy Chairman of ASIC, Peter Kell,  stated: “The first is that we have written to 
all  insurers  asking  them  to  undertake  a  review  of  their  own  claims  management 
practices,  their  own  claims  handling  in  life  insurance  going  bank  [sic]  at  least  five 
years to determine if there have been any problematic practices”. 
 
The document I seek is a copy of the body of this letter or email. 
 
The name and address of any specific insurer or superannuation fund can be redacted. 
 
Only a copy of the one document is required not a copy of every document sent to every 
insurer or superannuation fund. 
 
I am the authorised decision-maker for the purposes of section 23 of the Act. 
 
I have identified the 1document that comes within the terms of your request.   
 
Decision 
 
I have decided to release the document that comes within the terms of your request, a 
copy of which is attached. 
 

 

The document  found to  fall within  your request  is  the template of the letter sent  to  all 
relevant insurers.    
 
I note that your request does not seek access to the names and addresses of any specific 
insurer  or  superannuation  fund  contacted  as  part  of  the  review  referred  to  in  your 
request.  
 
As  the  document  found  to  fall  within  your  request  is  a  template  letter  there  was  no 
information contained in the document which identified the names and addresses of the 
intended recipients.   
 
I further note that your request is limited to a copy of the body of this letter or email.  I 
have  therefore  excluded  from  your  request  as  irrelevant,  the  closing  sentence  of  the 
letter naming the ASIC contacts, their telephone numbers and the signature line of the 
letter.   These deletions are applied on the basis of s22 of the FOI Act as outlined below.  
 
Section 22  
 
Section 22 of the FOI Act provides that where an agency or Minister decides not to 
grant access to a document on the grounds that it is an exempt document or that to 
give access to a document would disclose information that would reasonably be 
regarded as irrelevant to the request for access, and; 
 
  It is possible for the agency or Minister to make a copy of the document with 
such deletions that the copy would not contain irrelevant matter or be an exempt 
document; and 
 
  It is reasonably practicable for the agency or Minister, having regard to the 
nature and extent of the work involved in deciding on and making those 
deletions and resources available for that work, to make such a copy, 
 
the agency or Minister shall, unless it is apparent from the request or as a result of 
consultation by the agency or Minister with the applicant, that the applicant would not 
wish to have access to such a copy, make, and grant access to, such a copy. 
 
As stated above, I have found that it is possible to release the document falling within 
your request subject to deletions such that the document would no longer contain 
irrelevant matter and have applied those deletions accordingly.    
 
Assessment of Charges 
 
The FOI Act provides that charges may be assessed for time spent processing a 
request.  I have decided that there are no charges applicable to the processing of your 
request in this instance. 
 
Review Rights 
 
I provide you with the following information as required by section 26 of the FOI Act. 
 
In the event that you are dissatisfied with the decision: 


 

 
1. 
You may, within 30 days after the day on which you have been notified of this 
decision, apply in writing to ASIC for a review of my decision by another ASIC 
officer under section 54B  of the FOI  Act.    This request  should be addressed to 
me or to the Senior Manager, Administrative Law GPO Box 9827 SYDNEY or 
by email to xxxxxxxxxx@xxxx.xxx.xx 
 
2. 
You  may  apply  in  writing  to  the  Australian  Information  Commissioner  for  a 
review  of  my  decision  under  section  54N  of  the  FOI  Act.  Correspondence 
should be addressed to the Office of the Australian Information Commissioner at   
GPO Box 2999 Canberra ACT  2601 OR GPO Box 5218 Sydney NSW 2001. 
 
3. 
You may lodge a complaint to the Commonwealth Ombudsman in respect to 
the conduct of ASIC in the handling of this request. To do so, you can contact 
the Ombudsman's office either: by e-mail to 
xxxxxxxxx@xxxxxxxxx.xxx.xx, by letter to GPO Box 442 Canberra ACT 
2601, or by fax to (02) 6276 0123. 
 
 
Yours faithfully 
 
 
 
Evelyn Ong 
(Authorised decision-maker under subsection 23(1) of the FOI Act) 
for the Australian Securities and Investments Commission 
  

 

 
 
18 April 2016 
 
Dear, 
 
Life insurance industry review 
 
As you would be aware, the Australian Securities and Investments Commission 
(ASIC) is conducting an industry-wide review of life insurance claims practices. As 
part of this review, we are seeking commitments from insurers that you will undertake 
an assessment of your claims management system.  
 
Background  
 
The recent airing of concerns in relation to a large life insurer prompted the 
Government to ask ASIC to conduct this industry-wide review, to assess whether 
there are systemic issues that require further consideration or regulatory action.  
 
In conducting this review, ASIC will have regard to information and data from a 
range of sources, such as: 
 
  the Financial Ombudsman Service (FOS) and the Superannuation Complaints 
Tribunal (SCT); 
 
  insurers; 
 
  industry benchmarking services or data providers; and 
 
  industry experts and relevant stakeholders. 
 
We will write to you separately to seek some information about your products and 
how they have performed from a claims perspective.  
 
The outcome of this work will be an initial report to Government within 
approximately three months. We expect this initial report will inform whether there 
should be further potential avenues of inquiry.  
 
Claims handling reviews by insurers 
 
As part of this exercise, ASIC is seeking information from insurers about any work 
you have done, or intend to undertake, to establish that your consumer claims 
management practices and procedures are satisfactory, that there have not been 
inappropriately denied claims, and that your claims management does not exhibit any 
systemic problems.   
 
We understand that some life insurers have recently initiated a review of their policy 
definitions and/or their claims handling practices, and some insurers have also 
publicly announced reviews of these matters, typically with a level of independent 
oversight built into the review.   

 

 
In addition to those insurers who have already publicly announced their intention to 
conduct a review, ASIC has engaged with several other insurers who have also agreed 
that a review would be appropriate. Again, there has been agreement that independent 
assurance around such a review is desirable.  
 
We consider that there is an important role for such reviews to promote confidence in 
the life insurance industry, and we will be reporting on the extent of these exercises 
across the industry as part of our wider review. 
 
As one of the largest life insurers in Australia, we are seeking your commitment to 
conduct a review of life insurance claims handling. To ensure a degree of consistency 
across insurers, we expect any such review to include the following elements: 
 
  An independent (third party) reviewer with relevant experience in providing 
assurance to be incorporated into the review model. We are not seeking to 
prescribe in detail how independent assurance is built into your review, but 
consider that independence is an essential component; 
 
  A review of the integrity of your claims handling system, including policies 
and procedures, remuneration practices as they relate to claims handling and 
key performance indicators; 
 
  A review of product design processes, including the currency of policy 
definitions;  
 
  A risk-based review of denied or withdrawn claims, going back at least five 
years, to ensure that consumers have not been inappropriately denied claims; 
and 
 
  An appropriate mechanism to have FOS review claims where there is an 
unresolved dispute about a denied claim. 
 
We would be prepared to discuss any aspect of these elements with you.  
We understand that the Australian Prudential Regulation Authority may also be 
writing to you in relation to similar matters.  
 
We seek your initial response to this letter by Friday 29 April 2016. In the meantime, 
we would be happy to further discuss our broader industry review, or the scope and 
form of any proposed independent review of claims handling.