28 March 2018
MLC Life Insurance welcomes the announcement from Minister for Revenue and Financial Services Kelly O'Dwyer to call a new inquiry into life insurance focusing on the greater involvement of private sector life insurers in funding rehabilitation services for claimants.
MLC Life Insurance notes this new inquiry is consistent with a recommendation in yesterday’s report by the Parliamentary Joint Committee (PJC) on Corporations and Financial Services inquiry into the life insurance industry. We welcome the inquiry to enable life insurers to fund rehabilitation services.
MLC Life Insurance has long advocated for changing legislation that prevents life insurers from funding treatment to help support people return to health and their life, including their employment. It is well established that the longer people are off work due to illness or injury, the harder it is to return, and that being at work is good for people’s health and wellbeing.
In addition, MLC Life Insurance notes other recommendations from the report, notwithstanding that many of these have been addressed in existing reforms already undertaken by the sector via the Life Insurance Code of Practice (LICOP).
MLC Life Insurance particularly welcomes recommendations for:
- the industry to transition to more open approved product lists;
- the Australian Tax Office to provide a statement of superannuation and insurance subject to system capacities, cost effectiveness and a full review;
- life insurers to institute real-time disclosure that would allow consumers to track the progress of their claim;
- MLC Life Insurance is working on technology which will enable it to provide customers with real-time updates on the status of their claim
- the Australian Government to introduce legislation to facilitate the rationalisation of legacy products.
MLC Life Insurance is concerned about recommendations that may have unintended consequences. For example, any changes to the existing exclusion of life insurance from Australian Consumer Law (ACL) would need to be carefully considered. There are sound reasons for this exclusion, including the fact that ACL does not appear to have sufficient flexibility to deal appropriately with long tail insurance contracts or the specific needs of a life insurance contract.
MLC Life Insurance looks forward to continuing to engage constructively and support the Australian Government, the PJC, other policy makers and the Financial Services Council to deliver a simpler, fairer and more valued life insurance experience.