There is an increasing need for “robust and reliable evidence” when handling total and permanent disability (TPD) claims, a white paper from MetLife and Swiss Re says.

“It has been a turbulent time in the TPD landscape,” it says.

“Recent changes to product definitions are attempting to meet these demands and are starting to reference an individual’s capacity for future reasonable retraining and rehabilitation, to assist a return to meaningful employment.”

Changes to TPD product definitions have created uncertainty for insurers because there is still no definition of “reasonable” under current regulations.

It means the industry will require new case law to test the term’s meaning.

“What is ‘reasonable’ will feature heavily with the new TPD definitions,” the white paper says. “The emergence of these new definitions will shape the management of TPD claims and the way in which both in-house and external-provider rehabilitation resources are utilised.

“It is critical that life insurers make sound, evidence-based decisions on TPD claims under these new definitions, and adapt employability assessments to encompass these changes.”

Industry experts say problems in TPD business are due in part to group definitions becoming more like retail products and the expansion of automatic acceptance limits without underwriting.

TPD definitions in income protection are also unclear.

“In the current claims landscape where many TPD decisions are litigated and challenged, the need for robust and reliable evidence and assessment has never been more important,” the paper says.

The white paper covers industry best practice and innovation showcased at the inaugural Life Rehabilitation Summit, organised by MetLife and Swiss Re. More than 40 rehabilitation consultants from the life insurance industry attended the April summit.

“Rehabilitation, particularly early intervention programs, will play an increasingly vital role in the future of insurance,” MetLife Australia CEO Deanne Stewart said.

“By bringing together industry thought leaders and sharing new developments we can drive progress in this regard.

“The industry must take necessary steps toward proactive and preventative measures, and where possible restore our claimants to full health and independence.”