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Breast cancer group calls for standard life definitions

Breast Cancer Network Australia (BCNA) is the latest organisation to raise concern at a lack of standard definitions in life insurance policies in superannuation, questioning how this “may complicate the assessment of claims”.

“We believe there is far too much latitude around how the industry defines terms such as ‘terminal illness’ and ‘total and permanent disability’, which vary from fund to fund,” it says in a submission to a parliamentary inquiry into the industry.

The BCNA says definitions and how they are assessed should be published to provide greater clarity and improve dispute resolution.

It says there is evidence the lack of clarity delays payments and leads to greater stress for claimants.

Claimants are also forced to pay expensive legal fees to reach settlements.

The BCNA also wants an overhaul of the dispute process.

“We believe a prescribed set of rules needs to be implemented under a formal code, overseen by a proactive code compliance committee.”

The BCNA has not noted that advisers can provide a number of claims services for retail products, although with cuts to their revenue, they may be reluctant to do so in future.

Since the ban on commissions for life insurance sold in super, advisers have stopped advising clients because it is not profitable.

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“It is essential life insurance attached to super is included in the terms of reference of the code compliance committee, otherwise it will have little impact on average Australians,” the submission says.

“We believe that to increase community confidence, the code compliance committee needs to have substantial powers of audit and sanctions to enforce compliance.

“In addition, processes need to be transparent, allowing any breaches by industry to be published in full on a public website.”

The BCNA warns if a committee is not included in future industry reforms, bad publicity about claims will continue.  

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