Federal parliament to examine the role of life insurers in rehabilitation
The Commonwealth Parliament has announced a Joint Parliamentary Committee inquiry by the Corporations and Financial Services Committee into the role of life insurers in the provision of rehabilitation to injured and ill workers.
What is rehabilitation?
Rehabilitation can include any form of medical treatment or vocational assistance designed to assist a claimant to return to work. Currently life insurers who are assessing claims for income protection and total and permanent disablement benefits are not legally able to be involved in the funding and conduct of rehabilitation. Rehabilitation can be funded or provided by other insurers and Government entities such as workers compensation insurers, private health insurers, CTP motor vehicle insurers, Medicare and the NDIS. The provision of rehabilitation by those entities is regulated to ensure the rehabilitation requirements are funded appropriately and are reasonable in all the circumstances.
Commonly however life insurers will try and step into the rehabilitation space by either recommending rehabilitation or refusing to pay benefits if rehabilitation has been suggested by doctors, no matter what the reasonableness of the requirements might be or the ability of the claimant to pay for the services.
The terms of reference of the inquiry appear quite broad and can be summarised as follows:
- the interaction of Income Protection and Total and Permanent Disability insurance with State, Territory, and Commonwealth legislative and regulatory frameworks;
- the interaction of these products with social security benefits;
- how benefits available under TPD policies could be utilised to provide assistance and incentives to people returning to work;
- the current definitions, standards, and requirements claimants must meet to access services and payments;
- the consistency and transparency of IP and TPD insurance definitions, policies, and disclosure documents and information available to consumers about IP and TPD insurance.
There is obvious benefit to claimants for income protection and TPD benefits in also gaining access to rehabilitation funded by insurers. The benefits of a sustained return to work for injured and ill employees is well documented. It is hoped however that if the Inquiry recommends life insurers be able to conduct rehabilitation that appropriate standards including the accreditation of suppliers be regulated to ensure that a requirement for rehabilitation is not abused by life insurers to deny or delay the payment of legitimate claims.