The disability insurance campaign examined how life companies trained and supervised agents as well as the conduct and disclosure of those agents when advising on disability products. ASIC interviewed life companies that represent about 40 per cent of the disability insurance market and a total of 59 of their agents. The agents, selected from each State and Territory, were interviewed and a selected sample of their client files was examined.
Disability insurance is a complex product and a large part of the insurance industry.
Disability insurance provides an income or lump sum payment when the insured becomes disabled or suffers from a medical condition stated in the policy. This includes income protection, trauma insurance and policies that cover for total and permanent disability. ASIC's report into its investigation, the Life Insurance Disability Campaign Report, also revealed that there is a relatively large number of consumer complaints about disability insurance policies lodged with external dispute resolution schemes and ASIC each year. It is important that consumers be provided with appropriate advice from the beginning to reduce disputes and misunderstandings. We also want to ensure that adequate compliance structures are in place within the life companies for the training and supervision of their agents', Mr Johnston said.