The Commonwealth Bank’s life insurance business faces further scrutiny over the scandal involving its use of out-of-date medical definitions, this time at the banking royal commission.
The corporate watchdog last year cleared CommInsure of allegations its managers pressured doctors to alter medical opinions so it could deny insurance claims but found some practices were clearly out of step with community expectations.
The royal commission will examine the CommInsure case on Wednesday, with its managing director Helen Troup to give evidence.
The Australian Securities and Investments Commission investigation concluded CommInsure’s trauma policies had medical definitions that were out of date with prevailing medical practice, specifically for heart attack or severe rheumatoid arthritis.
CommInsure updated the definitions and informed about 600,000 customers about the change.
After reviewing previously declined claims, CommInsure paid more than 30 customers upwards of $4 million.
After a related ASIC investigation into its advertising, the insurer in December agreed to pay $300,000 towards a consumer advice service.
That related to misleading and deceptive online statements about the extent to which customers would be entitled to cover for trauma if they suffered a heart attack.
The royal commission is unlikely to go back over the scandal in detail but is expected to hear evidence about claims involving the definitions of heart attack and cancer in policies issued by CommInsure.
The chief operating officer of Freedom Insurance, Craig Orton, will first conclude his evidence to the inquiry.
© AAP 2018