Sovereign reassurance amid CBA claims

Sovereign is distancing itself from allegations that its Australian parent, Commonwealth Bank of Australia, has been avoiding paying claims.

Wednesday, March 9th 2016, 6:00AM

by Susan Edmunds

A media investigation in Australia has found evidence of Comminsure’s unethical treatment of customers, which has been backed up by the company’s former chief medical officer.

There are allegations specialists’ diagnoses were disputed, delaying tactics were used to avoid making payouts, definitions were not updated often enough and claims were refused in cases of organ failure if it was possible that the patient could receive a transplant.

In New Zealand, Commonwealth Bank of Australia operates ASB and Sovereign.

Sovereign chief medical officer John Mayhew issued a written statement that said Sovereign worked to high standards.

“Sovereign has been taking care of New Zealanders for the past 25 years and understands the important role health and life insurance plays in the lives of our customers to support them through emotionally and financially stressful times. We treat the claims of all our customers with the upmost importance and have thorough processes in place to ensure claims are fairly assessed and paid as quickly as possible. Last year alone we paid $350 million in claims to Kiwis,” he said.

“Working with many of the top medical specialists in New Zealand, we ensure our products are fair and reasonable and take into account medical developments. We regularly review policy definitions to ensure that definitions reflect changing medical diagnostic techniques and medical responses which may affect a claim.”

Industry commentator David Whyte said it was hard to predict what would happen from the latest allegations and whether there could be an effect on New Zealand.

In 2014, CBA had to apologise to customers for widespread mis-selling of financial products.

“They clearly thought it better to go public and confess rather than conceal the issue, but either way, I suspect ASIC will take a dim view of another stuff up from CBA - both investment and risk being publicly flogged within a very short space of time - not a good look. If ownership did become questionable, it's hard to see where CBA could go to unload their life insurance asset.“

Tags: Sovereign