Disabled Australians waiting for insurance claim decisions look to royal commission for help and hopeEryk Bagshaw
Published: February 13 2018 - 1:37PM
It’s 22 degrees and Shani Goldsbro can’t go outside.
“It’s like I’m numb from the head down,” she says. “My thinking slows. I wilt.”
Goldsbro has multiple sclerosis, a disease of the central nervous system that affects 23,000 Australians with symptoms that vary from heat intolerance to crippling vertigo to severe muscle paralysis.
A decade ago Goldsbro’s Melbourne business catered for Hugo Boss. But now she's lucky to cater for herself - let alone her husband, who looks after her in the Hobart home they moved to for the cooler climate.
Goldsbro is one of up to 14.8 million Australians likely to have total or permanent disability cover through their superannuation fund. But three years after she lodged a claim for $175,000, the 46-year-old is nowhere closer to receiving a decision from insurer Vision Super.
Last week, she lodged her statement of claim in the Victorian County Court, and is hopeful the royal commission into the banking and financial services sector - which begins Monday - will investigate firms she alleges are deliberately delaying decisions to avoid paying out claims.
The $44 billion life insurance industry has been under pressure since a joint Fairfax Media-Four Corners investigation in 2016 revealed insurance giant CommInsure knocked back customer claims on the basis of outdated medical definitions. A separate investigation found super fund trustees were turning life insurance contracts into junk insurance.
In a bid to head off government intervention, the Financial Services Council later established a code of practice, which requires members to make a decision within six months of a claim being lodged.
But Maurice Blackburn lawyer Josh Mennen told Fairfax Media the six-month target was repeatedly ignored, and the firm had identified more than 750 breaches of the code after its first six months of its operation.
“We are trying to highlight what appears to be a flagrant disregard for the rules they wrote for themselves,” Mennen said.
“It’s extremely disappointing. The industry should do everything that it can to ensure it follows its own rules. That simply is not happening.”
Among the hundreds of cases being examined by the law firm is Eamonn Keating. The 27-year-old Swinburne University student crashed his bike into a tree, lost his job and returned to study - only to have his claim delayed by 18 months. His insurer, AIA, told him 12 hours a week at university was equivalent to a full time job.
"I don't see how they are remotely comparable," Keating said.
Financial Services Council insurance consultant Nick Kirwan said delayed cases were rare and the industry needed time to meet its new standards.
Australian Prudential Regulation Authority data shows most claims are processed within a few months, while Australian Securities and Investments Commission figures show the industry average for rejections of 'total permanent disability' claims is 16 per cent.
"Are we surprised that there are some breaches? No," Kirwan said. "We set the standards to be quite aspirational and it will take time for the industry to get there."
Like Goldsbro, Sydney father-of-two Rocco Cutri has waited more than a year for a decision on his claim - well over the six-month target.
The chief financial officer's life was torn apart in 2012, at the age of 37. After being diagnosed with lymphoma, Cutri says he became one of the few people in the world to go blind post-cancer treatment.
After battling through the end of his marriage, he got back on his feet and learnt how to use a cane and a phone without his sight. Eventually he would return to work for two days a week.
Cutri, who once imagined himself driving a Porsche to the office, now struggles to manoeuvre through construction sites that litter the Sydney CBD.
“Even though my company has been fantastic, I’m not earning the money that I used to earn, I’m watching everyone get promoted,” he said. “I know that my intellect is good enough but I’m not going to get any further in terms of my career.”
It’s been 18 months since Cutri launched his claim for $250,000 with Suncorp, which insures 9 million Australians. A decision should have been processed in a third of that time.
Last week, the body tasked with overseeing the code of practice, the Life Code Compliance Committee, told Cutri he could not take any action because he had commenced proceedings in the NSW Supreme Court.
“I don’t want a Porsche any more, I can’t drive,” Cutri said.“I just want to provide for my kids.”
Like Vision Super, Suncorp declined Fairfax Media’s request for comment as the matter was before the courts. AIA said it "understood extended timelines can be frustrating".
"Every insurance claim is unique and they are frequently characterised by specific and complex circumstances, which can be beyond our control," a spokesperson said.
For Goldsbro, Keating, Cutri, and other clients who hope to have their cases highlighted by the royal commission, the delays can be more than frustrating.
“I’m trying desperately to stay well,” says Goldsbro. “Because I can't afford to get ill.”
The royal commission will begin with opening statements in Melbourne on Monday and has published procedures for leave to appear before Justice Kenneth Hayne.
Do you know more? email@example.com
This story was found at: http://www.canberratimes.com.au/federal-politics/political-news/disabled-australians-waiting-for-insurance-claim-decisions-look-to-royal-commission-for-help-and-hope-20180208-p4yzqz.html