It is uncanny that the top 300 senior executives from the Commonwealth Bank of Australia were meeting on Friday to talk about the bank's culture, vision and values at the same time as members of a federal parliamentary committee were attacking the bank's culture.
In a five-star Sydney hotel, CBA's chief executive Ian Narev addressed the bank's senior leadership forum as part of efforts to "motivate and inspire our senior leaders to work together to lead and shape our culture for the future".
In Canberra in the parliamentary committee room, Liberal MP Julia Banks focused on Narev's lack of knowledge of the CommInsure life insurance scandal as part of aggressive questioning of the chairman of the Australian Securities and Investments Commission, Greg Medcraft.
She said the CommInsure debacle, which was exposed by Fairfax Media and ABC's Four Corners, was a systemic problem inside CBA and Narev knew nothing about it.
When Medcraft said commissioners from ASIC had met the board of CBA this week to discuss various conduct issues, Banks responded cynically by describing it as a "talkfest".
Banks has quickly cemented a reputation as the parliamentarian most determined to build her profile without necessarily contributing to the wealth of knowledge on financial services.
She was foolish to force Medcraft to answer all her questions about CBA and CommInsure when the recognised expert on this topic, ASIC deputy chairman Peter Kell, was sitting right next to Medcraft.
Medcraft suggested Kell answer Banks' questions but she refused his request in some bizarre attempt to show how tough she was.
If you ignore her grandstanding there is actually a tremendous amount of change occurring in an industry which is characterised by out-of-date laws, antiquated claims-handling systems and almost certainly weak whistleblower protections.
Kell is overseeing the most significant change to the oversight of the life insurance in Australia.
In trying to drag the life insurance industry from the 19th century to the 21st century he has created unlimited work for professional services firms.
The ComminSure debacle, which started with denial of claims to five customers holding life policies written by Colonial Mutual Life Insurance Company, was the catalyst for a transformation in the relationship between ASIC and the Australian Prudential Regulation Authority.
Normally APRA focuses solely on prudential issues such as the ability of insurers to repay claims and their capital solvency, while ASIC is left to handle enforcement matters.
But thanks to CommInsure's inappropriate and unfair treatment of numerous claimants we now have APRA and ASIC working hand in glove.
APRA chairman Wayne Byres told the parliamentary committee on Friday that the prudential regulator was taking a close interest in claims denials because it "can provide important insights into the strength of an institution's governance, risk management and risk culture".
He said APRA has undertaken three streams of work.
It engaged with the board and senior management of CommInsure "to gain assurance over the robustness and completeness of the independent reviews commissioned to investigate the allegations, and to ensure a focus on stakeholder and community expectations through this process".
Secondly, APRA met the whistleblower who brought the CommInsure matters to public attention, Benjamin Koh.
As a result of that it is "considering whether the whistleblowing provisions in the Life Insurance Act 1995, which are designed to prevent the identification and victimisation of whistleblowers, have been adhered to in this matter".
Thirdly, APRA wrote to the boards of all active life insurers "to seek information about the effectiveness of their governance and oversight mechanisms for matters such as claims handling, benefit definitions, rejected claims and customer complaints".
Byres was grilled by Banks about cultural change in the banks following a series of scandals. She had a particular focus on the CBA.
Byres pointed out that the Life Insurance Act put all the legal responsibility for what happened at CommInsure on the CEO of Colonial Mutual Life and its board.
He stressed that the statutory responsibility was not held by the shareholder of the life company which is, of course, CBA.
Byres said the banks had previously focused on financial measures of performance and not given enough attention to the "soft stuff" which he referred to as cultural issues.
Byres said that we were now seeing "the cleaning of past issues".
Problem issues were coming to the surface as banks looked hard at the ways customers had been mistreated.
The weaknesses in the life insurance sector's claims handling was exposed in detail this week when ASIC released a report which found significant shortcomings in a number of areas.
There is more dirty linen to come. Kell told the parliamentary committee that ASIC is about to publish a report on the remediation actions taken by banks following failures in financial advice, including clients paying for advice they did not get.
It is hoped that Narev's offsite with his senior executive team included a session on how to speed up the remediation efforts by the bank.
This process has dragged on for far too long. While the bank is almost certainly not deliberately dragging the chain on remediation, the slow pace of providing compensation feeds into the accusations that the bank's culture has not changed.
