A move to allow greater involvement in worker rehabilitation by life insurers is a “dangerous Trojan horse” and part of a push to expand powers so fewer claims will need to be paid out, law firm Maurice Blackburn Lawyers alleges.

The law firm says the Financial Services Council (FSC) has revived a campaign to change the law so insurers pay the medical bills of a worker instead of paying out the insurance claim.

The proposal was rejected by a parliamentary joint committee in 2018. But the law firm says renewed FSC lobbying comes after indications the door to legislative reform may be more open than in the past.

Last month, tentative support appeared to come from Superannuation and Financial Services Assistant Minister Jane Hume, who said the Government is open to the idea of Total and Permanent Disability (TPD) insurers paying for claimants’ treatment.

She said both Treasurer Josh Frydenberg and Health Minister Greg Hunt are open to the idea of changing the way TPD is paid.

“Maybe there’s a way that life insurers could pay out for treatment rather than as a lump sum,” Ms Hume said.

Maurice Blackburn Principal Josh Mennen says it is “irresponsible” to suggest that an insurer should be “calling the shots” on medical treatment plans in an attempt to get workers back into a job market severely diminished by COVID-19.

“Any calls for an expansion of a life insurer’s rights in the medical decisions of claimants is premature and unwarranted,” Mr Mennen said.

“While it appears to be altruistic, the FSC’s campaign to change the law has always been a Trojan horse to push past the privacy and other legal rights of their disabled claimants and gain greater control over their medical treatment.”