12 October 2016
The Australian Prudential Regulation Authority (APRA) has today sent letters to life insurers and superannuation trustees setting out its expectations for improvements to the oversight and handling of insurance claims.
Based on information submitted by insurers and trustees, APRA has identified a number of areas where both trustees and life insurers can improve their practices to better meet expectations in relation to insurance claims.
APRA’s letters to life insurers and trustees coincide with the release of a report by the Australian Securities and Investments Commission (ASIC) on its investigation into the treatment of life insurance claimants. ASIC’s statement released today can be found on the ASIC website here: www.asic.gov.au/about-asic/media-centre/find-a-media-release/2016-releases/16-347mr-asic-issues-industry-review-of-life-insurance-claims/
APRA and ASIC will work with insurers and other stakeholders over 2017 to establish a consistent public reporting regime for claims data and claims outcomes, including claims handling timeframes and dispute levels across all policy types. It is expected that data will be made available on an industry and individual insurer basis.
In the letters released today, APRA acknowledges that life insurers and trustees are already working to address issues raised by both APRA and ASIC, and a number have projects underway to improve their claims processes and handling.
APRA is monitoring the progress of these activities, and their governance, and expects the key risks to be recognised and actively addressed by insurers and trustees.
Group insurance arrangements in superannuation, including claims oversight and governance practices, remain an area of heightened focus for APRA and it is expected that the superannuation and life insurance industry will continue to work to improve practices in this area over time.
The letters issued today are available on the APRA website:
The Australian Prudential Regulation Authority (APRA) is the prudential regulator of the financial services industry. It oversees banks, credit unions, building societies, general insurance and reinsurance companies, life insurance, private health insurers, friendly societies, and most members of the superannuation industry. APRA currently supervises institutions holding $5.4 trillion in assets for Australian depositors, policyholders and superannuation fund members.
Media and industry enquiries only:
APRA Media Unit
Telephone: 02 9210 3636
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APRAinfo: 1300 55 88 49