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ANZ cites premium reductions if time limits imposed
Imposing a six year time limit on late notified total and permanent disability claims (TPD) might serve to reduce group premiums by as much as four per cent, according to ANZ.
The big banking group has used a submission to the Parliamentary Joint Committee on Corporations and Financial Services inquiry into the Life Insurance Industry to point to the problems which had given rise to premium increases in the disability insurance space.
It said that in recent years insurers had experienced a spike in late notified claims resulting in insurers having to hold significant reserves to cover the liabilities for payment of the claims once they were notified.
"ANZ is proposing that a six year time limit on all TPD claims notification be legislated and implemented," the submission said.
"The six year period aligns with the time limit in respect of TPD claims which applies for complaints lodged with the Superannuation Complaints Tribunal."
"Were a time limit to be applied, analysis by our group life insurance business suggests that TPD premiums paid by members who hold TPD cover could be reduced by approximately four per cent, all things being equal."
The submission said this would represent a significant amount over the life of a member and, combined with other initiatives, would reduce the extent to which member balances were eroded by insurance premiums.
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I'd like to see the analysis. I bet it doesn't exist. And the most important words as quoted are the words "all things being equal"...what does that mean...it means they'll blame another part of the group life environment in the future for not reducing their premiums as they said they would.