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Underwriting delays for nib special offer

A recent nib New Zealand campaign offering cover for pre-existing medical conditions has been the victim of its own success with advisers being asked not to supply clients medical notes due to underwriting delays.

Friday, July 23rd 2021, 11:57AM 4 Comments

by Matthew Martin

nib NZ chief executive Rob Hennin.

The offer was open for three months, from April 1 to June 30, for any new customers who joined via nibAPPLY and was valid under nib’s Ultimate Health and Ultimate Health Max policies.

The offer covered certain pre-existing conditions after three years which would normally have a longer or permanent exclusion.

However, according to a recent email sent to advisers by nib's head of member engagement Nic Dorward, "Many applications have required manual underwriting which has resulted in a backlog of up to three weeks. As a result, some new business applications may take longer for terms to be offered or cover issued."

"To allow us to process the greatest number of applications in the shortest time, we’ve prioritised applications in the pipeline that don’t include medical notes.

"In future, please do not provide medical notes (unless nib specifically requests them). Doing so means that nibAPPLY cannot auto underwrite the application which causes delays in the issuing of cover. 

"nib underwrites new applications from the information provided by the client in nibAPPLY. Medical notes are only required when nib has specifically requested these.

"The provision of medical notes does not discharge the client’s duty of disclosure in the application questions," Dorward said in her email.

nib New Zealand chief executive Rob Hennin said the Ultimate Health special campaign offer was well received by advisers helping them to provide more of their clients with access to health insurance cover on more favourable terms than may have otherwise been the case.

Hennin said medical notes from a GP often only cover a part of the health record for their clients and nib underwrites based on answers to questions asked in the health cover application, whether that’s in paper form or digitally via nibAPPLY.

"As long as there has been full disclosure then advisers and their clients can have confidence in the underwriting terms we apply.

"Where further information is required to make an assessment we will liaise with the advisers to ask them to submit medical notes for their client.

"Of course, if advisers choose to pre-emptively submit medical notes we will review these prior to issuing policy terms, however, due to the manual nature of these reviews there will be additional time needed before policy terms can be issued."

Hennin said members will be covered when their acceptance certificate is issued and clients who need to claim in the interim were likely to have conditions that would not be covered under an underwritten product.

"Like all insurers, we would respond consistent with the specific circumstances of the member."

Tags: health insurance nib Rob Hennin Underwriting

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Comments from our readers

On 23 July 2021 at 12:25 pm JPHale said:
I have a significant objection to a point in this communication, and I have raised it with nib directly.

"In future, please do not provide medical notes (unless nib specifically requests them). Doing so means that nibAPPLY cannot auto underwrite the application which causes delays in the issuing of cover. The provision of medical notes does not discharge the client’s duty of disclosure in the application questions."

This raises significant culture and conduct concerns around client disclosure if the adviser is given medical notes and they are not passed on to nib.

The base principle of insurance is good faith, and the client has done what they can. However, if there is a subsequent non-disclosure decline of a claim with the adviser not providing the notes to nib they:
* Put themselves in breach of section 10 of the Insurance Law Reform Act of 1977.
* Also put themselves in the firing line for a FADC review as a breach of the code of conduct,
* and potentially FMA court prosecution too if the FMA wants to make a meal of it.

The directive given to advisers by nib in this communication is reckless and not in the spirit of good customer outcomes, advisers should be wary of this and ignore this directive from nib.

My follow up question to nib on this was; where advisers are implicated in non-disclosure claim issues as a result of nib's directive, is nib going to indemnify the adviser's impacted?
On 26 July 2021 at 8:36 am Backstage said:
I agree JP, how can supplying the detail not discharge them? I would suggest it does not discharge NIB. Capacity issues are not the clients problem. It certainly is our problem as right now their delays are causing client dissatisfaction. New clients are asking are they always this slow?
On 3 August 2021 at 2:41 pm Concerned1 said:
@JPHale they do go on to say quite clearly: "Of course, if advisers choose to pre-emptively submit medical notes we will review these prior to issuing policy terms, however, due to the manual nature of these reviews there will be additional time needed before policy terms can be issued." I'm assuming that the communication was probably relevant to applications that are intended to go through their automated Underwriting approach. Also the provision of medical notes not discharging a client from disclosure in an application is a nothing burger sentence. There are plenty of things that are ommitted from medical notes, last symptoms, undisclosed conditions that you haven't seen a doctor for etc etc.
On 4 August 2021 at 12:00 pm JPHale said:
@Concerned1 yes, they do say that (pre-emptive medical notes comment), however, long experience has shown that the whole message is rarely digested and the what was said and what was heard aspect can have different interpretations.

I have no issue with the disclosure on the application form being correct, that is well established.

My point is the risk the adviser has if the adviser is given medical notes by the client that they don't pass on as a direct result of nib's communication stating they don't want them unless asked for.

This risk is realised when that same client has a claim that is declined on the basis of non-disclosure where the medical notes contain the non-disclosure information. This puts the adviser squarely in the sights of a section 10 violation as well as a conduct issue against the code of conduct...

I may be putting too fine a point on this for most readers, I often do, however, this is the stuff I have had to help manage in the past when the wet smelly stuff hits the whirly thing, and far more frequently than most people realise.

As I have also said, I will be ignoring nib's directive and supplying ALL medical information provided to me by clients to nib when we are working with them, I suggest other advisers do the same.

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