ASK, ASSESS, EXPLAIN – THE ASSESSOR’S TRIFECTA

Col Fullagar looks at claims handling and asks whether it is living up to the expectations of the Life Insurance Code of Practice?

Recently a senior claims manager was asked “What do you see as the fundamental role of a claims assessor?” The manager thought for a moment and shot back “To pay valid claims as quickly as possible.”

 In fact, that is the role of the accounts department.

One might suggest the role of a claims assessor is to request the information necessary to identify whether or not a claim meets the relevant policy terms.

If the answer is “No”, either decline the claim or request more information.

If the answer is “Yes”, send appropriate details to the accounts department so they can do what they do best and make payment as quickly as possible.  Meanwhile, for a revenue claim, the assessor should identify for how long the claim is validated by the information currently held, at the end of which time, the cycle restarts.

The crucial word in the description of the assessor’s role is “necessary”, that is, the minimum amount of information required to make the assessment; anything beyond that is superfluous and, by definition, irrelevant. As the Life Insurance Code of Practice so succinctly puts it in regard to the insurer’s commitment “We will only ask for and rely on information and assessments that are relevant to your claim and policy …………” (Section 8.5).

Sadly, as countless advisers and claimants have and will discover, the reality can be way different.

How often is the calling for a document or information justified on the basis that “it is a standard claim requirement”. Arguably, there should be no such beast.

“But what about an initial claim form from the claimant?” Is it really necessary, for example, if there is a long-term income protection claim afoot and a TPD claim is now to be lodged or could the additional information relevant to a TPD claim be identified and obtained in a different way?

“Well surely monthly progress claim forms are required to validate periodic benefit payments?” Clearly not, as it is relatively common for the frequency of claim forms for stable, longer term claims to be reduced to quarterly or even six-monthly, however, even this hides the truth. If the manifestation of a claim condition is variable, there is no reason why the assessor could not communicate with the claimant to the effect that “Your treating doctor is anticipating no change in your condition until (DATE), so we will not require an update until then.” Of course, the assessor might add a sentence to the effect that “If something changes prior, could you please let me know.”

 Some other common examples of so-called standard claim requirements:

• Financial information

“We have identified that you have an interest in the following 7 business entities. For each, could you please send us financial statements and tax returns for the last 3 years”

How many times does the equivalent of this request result in the claimant having to find and ferry tens, if not scores, of documents to the insurer and then field a plethora of questions coming out of a review of those documents.

Why not detail that which is required first and then only request that which is relevant “We have identified that you have an interest in the following 7 business entities, however, only those that are aligned to your personal exertion income are relevant. Could you please identify those entities and, for each …….”

• Medical informatio

A recent media headline announced “Specialist wait times blowout – Patients waiting years for crucial appointments”.

The reality is that medical practitioners are time poor, and none more so than specialists. Given the choice of treating patients or writing insurance reports, the choice is obvious. It is crucial this is understood and respected by insurers, so medical practitioner time is not wasted. If not, the outcome will almost certainly be an expansion of the position taken by one group of doctors who announce on their website they will no longer be responding to requests for reports from insurers.

A couple of thoughts:

• Is having a medical practitioner complete an initial claim form a waste of their time in so far that insurers almost universally subsequently request a report anyway? Why not ditch the initial form and simply request a report? and
• In regard to questions asked of GP’s and specialists, might greater care be taken to only ask specialists questions that cannot be more appropriately asked of a GP, for example, the latter is far better placed to comment on the medical history, severity of symptoms, etc.

The fact is that, irrespective of the claim requirement, there will always be a situation when it is unnecessary, cannot be obtained or can be obtained in a different format or less intrusive way.

So is this article advocating the eradication of “standard claim proofs” such that assessors take on an unstructured approach to claims management? Of course not, but it is advocating a more considered, flexible and dare it be suggested, professional approach, be adopted that calls on the assessor, prior to asking for a claim proof to weigh up:

• the facts of the claim;
• the range of available information; and
• of that which is available, what is necessary; and
• of that which is available and necessary, what would be the easiest, quickest and least intrusive to obtain.

This might even involve the assessor entering into a meaningful discussion with the claimant and/or the adviser in order to identify that which satisfies the last requirement.

But there is more to the assessor role than asking and assessing …………

Section 8.5 of the Code continues on from the above extract “ …….. and we will explain why we are requesting these ……. If you disagree with the relevance of any information, we will review the request, and if you are not satisfied with our review, we will tell you how you can make a Complaint.”

The fascinating dynamic encapsulated in the latter half of Section 8.5 is that the insurer, via the assessor, has a responsibility that transforms “dictating” what is required to being accountable and explaining what the assessor believes is required and why.

Not only must the assessor explain, but the explanation must be such that the claimant can make an informed decision about whether to acquiesce and provide the requested information or to disagree and challenge relevance. If an adviser is involved as the intermediary, they must be able to listen to and understand the reason sufficiently well to pass it onto the claimant, again so the claimant can make that all important informed decision.

If the assessor’s explanation is such that the adviser cannot identify the compelling need for the information requested, it would be wise of them to imitate Ms Hanson’s famous words “Please explain” and continue to repeat the phrase until clarity is achieved, or potentially, the requirement is withdrawn.

An adviser who does not have the requisite understanding and simply encourages the claimant to provide that which is requested “in order to keep the claim moving”, could be exposing themself to risk if the requirement is unnecessary and it causes delays, inconvenience or worse still prejudices the claim in some way.

So, what does clarity look like? An assessor once emailed an adviser to request that the claimant attend for an independent medical examination. The reason given was “The aim of the independent medical examination is to gain a more complete picture of your condition and circumstances and an independent opinion in regard to treatment and prognosis, which will assist us in determining if you satisfy the relevant definition.”

 Sounds impressive, but it is actually Jibber Jabber in so far that, if the assessor wanted to gain a more complete picture, the treating medical practitioner would be in a better position to assist. If an opinion in regard to treatment and prognosis is wanted, a physical examination will add little value.

The point that is all too often missed is that, if additional information is deemed necessary, in this case an IME, there must be a “gap” in the information currently held. That “gap” is the reason for the IME or whatever other claim proof is required. It is the gap that needs to be identified and espoused, and, at the risk of being a rebel, life would be rendered far better if the practice of invoking the Cone of Silence ceased, and assessors actually called it straight, for example “The medical information provided to us has been referred to one of our medical officers and she believes the reported symptoms do not align with the severity of the condition. We would like to obtain a second opinion ……….”

It was wisely stated many years ago that an assessor should never be allowed to communicate a requirement or decision unless they know and can explain the reason for each. If insurers want to up the ante in their training regime, this simple rule will provide an immediate boost.

Taking the above approach might even result in the claimant and adviser gaining some understanding or even appreciation for the claim assessment process …….. there’s a radical thought.

Summary

In September 2022, ASIC issued a report headed “ …… review finds room for improvement remains with life insurance claims handling.”

The report went on to identify the overuse of intrusive claims handling practices including non-disclosure investigations, physical surveillance and poor treatment of mental health claims leading to consumer harm.

ASIC expressed concern that some insurers still appear to be “fishing” for non-disclosures to avoid paying legitimate claims.

Insurers were put on notice that ASIC would take action where it sees consumer harm arising out of poor claims handling practices and it reminded insurers they are now legally obliged to act efficiently, honestly and fairly when handling claims.

The role of a life insurance underwriter has long been lauded, however, as important as it is, the role of a claims assessor far outweighs it in so far that claims assessors literally hold people’s lives in their hands, and not just the lives of claimants but often the claimant’s family as well.

The aim of this article is not to criticise assessors but rather to recognise them and the potential their role has to make a difference.

Why is this not recognised in the qualifications assessors must gain in order to practice their profession? Why is it not a TAFE course as a minimum, with CPD points required to continue in the role? Why are they not remunerated accordingly?

The examples and suggestions included above represent a minute percentage of what arguably needs to be reviewed and reworked.

Michael Douglas said it well in the movie The American President “We have serious problems to solve and we need serious people to solve them” or, in the alternative, “We need people to be serious about solving them.”

Those best placed to bring pressure to bear in order to have the problems solved are not the regulators, but financial advisers via their licensees. Arguably, there is no time to lose !!