Differences about what is partial disability
As Asteron tries to marry the former Royal & SunAlliance (RSA) life business in to its own model, it’s rolled on top of a couple of burrs hidden under the bedsheets.
Tuesday, May 4th 2004, 6:17AM
Strategy Financial Services adviser Graeme Lindsay was the first to take Asteron to task over its response that it did not have to increase former RSA income protection policies.
After robust discussion about just what the wording of the policies meant under the Fair Trading Act, Lindsay says Asteron told him early in March that it would allow increases on the old policies, but the increases would be on terms applying to new policies.
Lindsay says while he is pleased with the outcome, he is disappointed that the decision has yet to be communicated to the industry.
Boucher says the delay has been due to the company’s need to establish appropriate operational and procedural issues to deal with the increase requests. But a communiqué will be issued shortly.
Lindsay, meanwhile, has decided he will do a full review of ratings on income protection products.
The delay and a new problem with Asteron’s take on another former RSA policy - this one concerning partial disability – has sparked the review he says.
“Asteron is of the view that if a policyholder is partially disabled but unable to get work because of the disability, then there is no claim as the policy requires one to be working to be partially disabled,” Lindsay says.
“Now, Asteron are saying that they would pay a proportionate benefit - ie 50% disabled, then 50% benefit - even though you can not find work”
In a newsletter to clients and fellow brokers, Lindsay says that’s despite a reassurance by RSA back in 1995 that it would pay the claim.
Ben Ryan, Asteron’s claims manager, reckons it is sometimes an unemployment matter, rather than a disability issue.
His colleague, Daphne Geisler, Asteron’s general manager operations, explains partial disability products evolved out of the recognition that as people recovered there was an opportunity to ease them back into the workforce.
“It recognised that insurance plays a broader role in recovery,” Geisler says. “As part of that we (Asteron) pay out (under disability cover) up to $40,000 for professional rehabilitation providers, for vehicles to be adjusted and for home help.”
But Geisler and Ryan say policies can’t hope to cover all contingencies and Asteron goes with the spirit of the policy.
“So we feel if 50% of the loss is due to the disability, that’s what we will pay,” Ryan says.
It looks like the dispute will come down again to legal opinions on the wording of the policies.
| « MDRT pays tribute to Fidelity's Watson | Fidelity Life picks up Lumley » |
Special Offers
Commenting is closed
|
|
Printable version |
|
Email to a friend |
