There's an old saying that you get what you pay for, and in CBA's case it paid Deloitte to "independently" investigate its life insurance division and received a report that found no systemic issues nor misconduct.
Deloitte was appointed to investigate bombshell allegations made by CommInsure's former chief medical officer that the life insurer was putting profits before people.
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Its conclusion was that it "did not identify any systemic issues relating to historically declined claims and did not identify any evidence that the current and planned improvements to the claims handling processes are designed in a way that could systemically deliver poor customer outcomes."
It examined 797 declined claims, which represents 20 per cent of denied claims, and "each sampled declined claim was assessed using a process designed by Deloitte with the objective of establishing whether the claim was declined in accordance with the procedures and processes in operation by CommInsure at the time of the decline".
From this, 41 claims were identified and referred to the life insurer to undertake a reassessment of the initial decision to decline the claim.
But it didn't interview the customers or their families. Instead it relied on the files.
Of those claims it found nine customers (about 1 per cent) had benefits paid or increased, with 11 cases still under reassessment.
The former chief medical officer Dr Ben Koh alleged CommInsure was delaying and denying claims, including using outdated medical definitions, and that some claims managers were cherry-picking doctors and leaning on doctors to change their opinions. He also alleged potential tampering of files in the chief medical officer opinion database.
![James Kessel, 46, had his insurance claim rejected by CommInsure after he had a heart attack.](/web/20170301114815im_/http://www.theage.com.au/content/dam/images/g/n/a/6/9/y/image.related.articleLeadwide.620x349.gungnv.png/1488326300626.jpg)
On Tuesday afternoon, CBA released a two-page document saying the Deloitte review along with two other reviews, by DLA Piper and Ernst & Young, were now complete. "Having regard to all of the work that has been completed, including the independent expert reviews, the board concludes there is nothing to support the concerns of wilful or widespread misconduct," CBA said.
Two of the reports remain confidential, but there is an expectation they will be released as part of a parliamentary joint committee inquiry into life insurance.
![Michael Gill was declined by CommInsure because it ruled his case of rheumatoid arthritis was an out of date definition.](/web/20170301114815im_/http://www.theage.com.au/content/dam/images/g/n/h/1/l/k/image.related.articleLeadwide.620x349.gungnv.png/1488326300626.jpg)
A key criticism of the Deloitte report is that it was a desktop investigation. It didn't speak to customers to get their experiences first-hand.
Besides not having access to customers, did it have unfettered access to emails, documents, employees and the whistleblower? The report says it drew on emails, but what about documents that have legal privilege slapped on them?
![CBA chief Ian Narev told a parliamentary inquiry no staff had been terminated in the wake of the CommInsure inquiry.](/web/20170301114815im_/http://www.theage.com.au/content/dam/images/g/r/u/r/i/9/image.related.articleLeadwide.620x349.gungnv.png/1488326300626.jpg)
In terms of remuneration, the report says this was excluded from the review. Why?
Inappropriate incentives lay at the heart of another recent scandal that engulfed the Commonwealth Bank – its financial planning scandal, in which thousands of customers were given inappropriate advice by commission-hungry financial advisers.
Another glaring concern is that Deloitte considers a claim denied under an outdated definition is an appropriate outcome. This distorts the final outcome.
In the case of heart attacks, the definition was a decade out of date. Dr Koh had brought this to CommInsure's attention after he completed an internal audit, but the definition was not updated.
This means Deloitte doesn't consider using a decade-old definition as a systemic failing, nor is it a systemic failing that CommInsure hadn't updated that definition.
In a statement CommInsure says: "We actively searched for previously declined trauma claims and have paid $2.5 million to 17 eligible customers based on the changed definition."
CommInsure updated its definition of heart attacks and backdated it two years, despite the definition being a decade old. Those 17 customers paid out relate to the past two years.
CommInsure says: "In May 2014, CommInsure's heart attack definitions were consistent with a number of competitors but the majority had changed their definitions."
That is correct, but just because "some" others hadn't changed their definition doesn't absolve them of their responsibility.
In its report, Deloitte says data issues restricted its ability to make statistical conclusions in relation to the claims review.
It says that, in analysing errors in limited instances, individual case managers and delegated authority holders had made more than one error. It didn't say how many case managers, or whether they were fired, or how many claimants that involved.
It does say CommInsure management is in the process of reviewing claims assessed by these case managers, and delegated authorities, during the review period to identify other claims, if any, that should also be reassessed.
Some would argue that the Deloitte report was a whitewash and sanitisation on what happened. If that's the case, APRA has let them get away with it. APRA recently stated that it was "satisfied that the reviews are robust, complete and independent".
In the past year, Fairfax Media has received hundreds of emails from aggrieved life insurance customers, including CommInsure, many with compelling and disturbing stories of their treatment. It is hard to reconcile their concerns with the report presented by Deloitte. Perhaps that's because nobody asked them.
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