Deloitte has cleared CommInsure of systemic failures in rejecting claims, in a report commissioned by parent Commonwealth Bank.

The Deloitte Claims Review Program follows concerns raised by regulators and the public about CommInsure’s claims management practices.

It examined a sample of life insurance claims declined between May 1 2011 and April 30 last year, looking for incorrect decisions or poor customer service.

Of 797 declined claims, Deloitte referred 41 to CommInsure to reassess the initial decisions.

Of those 41, eight resulted in a financial impact for the customer; 12 decisions were substantiated but a poor customer experience was identified; 10 featured appropriate rejections, and the customer was not affected; and 11 are being reassessed.

The report says 96.1% of decisions were appropriate and 1.5% were correct but the customer experience was poor.

CommInsure has paid $320,000 to the eight customers financially affected.

Deloitte says it found examples of good customer advocacy by the insurer. “These include CommInsure assessing claims under a current policy definition where the old policy would not have covered the claims, consideration being given to other policies where the claimant may have coverage, and the use of ex-gratia payments where appropriate.”

But Deloitte finds room for improvement in claims handling, including upgrading training materials and providing refresher programs to all claims staff, and the design and implementation of a standard claims assessment file structure and format.

This would enable consistent assembly, file content, documentation of information-gathering and conclusions. It should include a consistent process for identifying the most relevant policy terms applicable to customers.

Deloitte has also recommended an enhanced data quality framework to ensure the correct classification of all claims.

“We are in the process of implementing these improvements, which are in addition to the actions already taken last year,” CommInsure MD Helen Troup said.

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