CommInsure, one Australia’s biggest life insurers with about 4 million policy holders, has been caught out using unscrupulous practices buried in the fine print of their contracts to deny, delay or avoid paying claims.
Meet some of the key players and victims of the scandal engulfing one of Australia’s big four banks.
The whistleblower: Dr Koh
Dr Koh has said he and his staff were told to change or delete their medical assessments if they did not suit the claims manager. In 2014, Dr Koh examined 40 other heart attack claims and concluded more than 50 per cent of legitimate claims could be rejected, based on CommInsure’s Troponin levels. Dr Koh recommended the definition be changed, but the outdated definition remains in use.
When Dr Koh elevated his concerns to the board, he was assured they would be investigated. Instead he was dismissed.
The key reason given was an allegation he had breached the bank’s internet policy by sending documents to his personal email â€” an administrative safeguard he says he had sought permission for, after discovering the missing paperwork.
Before he left Dr Koh sent a final email to Commonwealth Bank chief executive Ian Narev, expressing his concerns and frustration. Ian Narev never personally wrote back to him.
The heart attack victim: James Kessel
An internal email obtained by Four Corners/Fairfax reveals CommInsure did not dispute the severity of Mr Kessel’s heart attack. However it rejected his claim because he did not have enough of a substance called Troponin present in his bloodstream.
Cardiologists say CommInsure’s heart attack definition was out-dated and that Troponin, on its own, should not be used to diagnose severity. The email reveals CommInsure knew this, but still denied Kessel’s claim.
The IT worker: Evan Pashalis
In 2014, Evan Pashalis, 37, found out he had leukaemia and he was diagnosed as terminally ill. Two doctors found he was unlikely to live more than 12 months and a third gave him a 30 per cent chance of living a year.
When Mr Pashalis lodged a terminal illness claim with CommInsure and was rejected, he went to lawyer Michael Bates to help him overturn the decision. Since his diagnosis, Mr Pashalis has undergone further medical tests.
Terminal lung condition: Nicholas Bishop
In 2013, Nicholas Bishop was diagnosed with a terminal lung condition and was given 12 months to live. He got in touch with lawyer Michael Bates after his life insurance claim had been rejected â€” on the basis that if he received a lung transplant he might live longer than 12 months.
Photo: Nicholas Bishop was diagnosed with a terminal lung condition and given 12 months to live. (Four Corners)
Four Corners obtained an internal document relating to Nicholas Bishop’s assessment, which said: “While we maintain that the correct decision has been made, the position the media might take is a 57-year-old male nurse who has held insurance cover for 12 years is diagnosed with a terminal condition and requires a lung transplant, is unable to access his insurance benefits.”
The former employee: Helen Polydoropoulos
Helen Polydoropoulos was a customer service representative at CommInsure until she was diagnosed with multiple sclerosis in 2011. She was “ill-health retired” from the bank and was advised by the bank’s chief medical adviser, Dr Colin Johnston, to claim for “total and permanent disability”.
But when she lodged her claim she was rejected by her insurers, on the basis that she was fit for work.
Ms Polydoropoulos tried to get in touch with Dr Johnston, who signed both her letter of medical retirement and the rejection letter from CommInsure. He never returned her calls. Four Corners contacted Dr Johnston who said: “We act on the advice of specialists.”
In the four years since her diagnosis, Ms Polydoropoulos’ condition has deteriorated. She was financially struggling, and even became homeless. She now suffers from depression and has moved in with her mother.
‘Major depressive disorder’: Michael Attwater
When Commonwealth Bank employee Matthew Attwater developed a major depressive disorder, he was told he was permanently unfit for work, and was “medically retired” from his job as a customer services representative at the bank.
The bank commissioned a psychiatric report on Mr Attwater which found he was not fit for work.
But when he lodged his claim for Total and Permanent Disability, CommInsure relied on a phrase from the same psychiatrist to argue that he was indeed fit for work.
It took three years for CommInsure to settle Mr Attwater’s claim â€” shortly after he was interviewed by Four Corners. BeyondBlue chairman Jeff Kennett described the bank’s attitude to its employees as a disgrace.
The mental health advocate: Jeff Kennett
Former Victorian premier Jeff Kennett is the founding chairman of mental health advocacy group BeyondBlue. In an interview with Four Corners, Mr Kennett spoke out against CommBank’s attitude to mental illness, calling it disgraceful. In relation to Michael Attwater’s case, he said that retiring an employee based on their mental health illness could do further psychological damage.
Mr Kennett has strongly questioned the life insurance industry’s ability to develop its own code of conduct and has called for outside intervention. He says he does not trust companies to self-regulate and believes a code of conduct might have to be imposed on the industry.
The chief executive: Ian Narev
Ian Narev, chief executive of the Commonwealth Bank, has said ethics are a core value of the bank, and states that the claims made against CommInsure are inconsistent with CommBank’s culture, values and management style.
Mr Narev has admitted to using an outdated definition for heart attacks but says CommInsure is in the process of amending it. He has apologised and promised to personally meet with customers, brought to his attention by Four Corners. He said their experience, while unfortunate, does not reflect the experience of the vast number of CommInsure customers.
It is not the first time Mr Narev has been forced to apologise. In 2014, when accusations of forgery, fraud and a high-level cover up were levelled against the bank’s financial planning division, he made a public apology to customers and promised to clean up the mess.
Mr Narev did not comment directly about accusations made by CommInsure’s former chief medical officer, Dr Koh. Photo: Commonwealth Bank CEO Ian Narev says ethics are a core value of his bank. (Four Corners)
The lawyer: Michael Bates
Litigation lawyer Michael Bates has three clients involved in the CommInsure scandal.
He represents Dr Koh, the whistleblower and former chief medical officer of CommInsure who raised allegations of unscrupulous and unethical practices by the insurer. Dr Koh was sacked from CommInsure.
Mr Bates also represents two CommInsure policy holders, Evan Pashalis and Nicholas Bishop. Both men were diagnosed with terminal illnesses, and both were declined by CommInsure when they initially filed their claims.
Mr Bates claims the charges against the bank are extraordinary â€” “the biggest thing I’ve heard as a litigation lawyer working in the insurance world” â€” even going so far as to compare them to a Hollywood plot.
The politician: Senator John Williams
Senator John Williams has met and looked into the case of James Kessel, who was denied a trauma payout despite suffering a major heart attack.
The senator has serious concerns about how CommInsure treats its customers. He has raised the prospect of investigating CommInsure’s practices in a Senate committee, which has the power to call senior executives.
In 2014, Senator Williams was also critical of the Commonwealth Bank during the scandal in its financial planning division. At the time, he questioned senior members of the bank in Senate committee meetings. Photo: Senator John Williams has serious concerns about how CommInsure treats its customers. (Four Corners)
Originally published ABC News March 8, 2016
Appalled, disgusted, alarmed are but a few of the emotions that I experienced as I watch this story unfold on ABC’s Four Corners. As CEOÂ . Ian M Narev responded with the glib, patronizing bank speakÂ “Our ongoing goal is to have highly motivated people putting the customer at the centre of everything we do etc etc”.
As he spoke my mind instantly recalled the movieÂ “The Rainmaker”Â and how much I though he resembled Great Benefit’s unctuous president Wilfred Keeley who decided there would be no payout for the grieving parents and no fee for Rudy or Deck. His act was to attempt to flee the country and have Great Benefit declare itself bankrupt, thus allowing it to avoid paying punitive damages to the Blacks.
I watch with interest how and in what way will this disgusting culture of “profit as the god” be addressed.
Certainly internal fixes will never be acceptable.