As CommonWealth Bank (ASX: CBA) was getting thrashed down by the Slater &Gordon for fees gouging and paying below standard market rate, Hayne Royal Commission spotted a litany of delays and denials in its insurance claims. On Wednesday, Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry highlighted several dodgy practices undertaken by insurers. Among all, CommonWealth Bank’s insurance arm was on the top of collision course with the public.
The counsel assisting the commission, Rowena Orr, QC, took CommInsure's managing director Helen Troup through events that included the denial of claims to the policy holder on not meeting the definition of heart attack and thereafter misleading the Financial Ombudsman Service.
In January 2014, CommInsure declined a woman’s trauma cover claim for breast cancer stating she did not have mastectomy. That was because the readings of policy holder’s troponin which is used to diagnose a heart attack was below the readings required to claim heart attack according to CommInsure’s backdated policy. At a conciliation, CommInsure tried to settle the dispute by offering half the insured sum but customer declined the settlement offer.
The denials of claims to the heart attack sufferer comes after the insurer has decided not to update the medical definition for heart attack. The world heart federation updated the global definition for heart attack in 2007 but CommonWealth Bank did not update its definition until 2016. This must have helped the company to save around $2.5 million but now it brings it in disputes with policy holders and other regulatory bodies.
Following this disclosure, CommonWealth Bank’s share price slipped by 0.966% to $71.235 on 13 September 2018 (1:04 PM AEST). The stock has seen a performance change of -5.26% over the past one year.
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