The Australian Securities and Investments Commission took aim at Suncorp late last week, saying there were some major flaws in the way its AAMI brand managed claims from the 2015 Wye River bushfires.
“The way that AAMI communicated with its customers, the way it went about handling those claims, we agree that there were serious deficiencies with AAMI’s process,” ASIC senior executive leader Michael Saadat said on Friday.
Saadat’s comments come as ASIC campaigns to have the Corporations Act amended in order to lift an exception that applies to claims handling across both life insurance and general insurance.
Currently, insurers’ claims-handling activity does not have to meet the consumer protection provisions of being efficient, honest or fair – obligations which apply for all other financial services activities.
The rule means ASIC was only able to fine Suncorp $43,200 for misleading advertising in relation to the bushfire which tore through Victoria’s Wye River region, destroying 116 homes.
“We would have liked to have addressed the problems with the claims-handling process and that is something we weren’t able to address because of the legislation we currently have in place,” Saadat told the House of Representatives economics committee.
While the government has accepted ASIC’s recommendation to remove the exemption, it’s understood it is waiting for the findings of the banking royal commission before moving forward.
When contacted by Insurance Business, a spokesperson for Suncorp said it would be inappropriate to comment on the matter as it is currently before the Financial Services Royal Commission.
“Suncorp is committed to supporting the Royal Commission and welcomes any measures that will deliver improved outcomes for our customers,” said the spokesperson.
